NEW YORK, February 7 (Reuters): The U.S. benchmark S&P 500 stock index closed more than 1.0% higher after a sharply volatile session on Tuesday, recovering from the biggest one-day decline in the index in more than six years on Monday. Wall Street stock indexes repeatedly swung from positive to negative territory during Tuesday’s session while the Dow Jones Industrial Average had a more than 1,100-point difference between its intraday high and low. The Dow posted a 2.3% increase, its biggest daily percentage gain since Jan. 29, 2016, while the S&P 500 rose 1.7%, its biggest one-day gain since Nov. 7, 2016, the day before the election of Donald Trump as president. On Wall Street, all but two S&P 500 index sectors ended higher, with economically sensitive materials, technology and consumer discretionary indexes posting the biggest gains. Rate-sensitive utilities, down 1.5%, led decliners. “Despite violent moves in the last couple days in the market, fundamentals in the economy are very strong and it’s not just the U.S., it’s throughout the global economy,” Alicia Levine, head of global investment strategy at BNY Mellon Investment Management in New York. The Dow Jones Industrial Average rose 567.02 points, or 2.33%, to 24,912.77, the S&P 500 gained 46.2 points, or 1.74%, to 2,695.14 and the Nasdaq Composite added 148.36 points, or 2.13%, to 7,115.88. The pan-European FTSEurofirst 300 index lost 2.50% and MSCI’s gauge of stocks across the globe gained 0.14%. Emerging market stocks lost 2.74%, but the iShares MSCI emerging markets exchange-traded fund jumped 3.3%. Commodity markets remained gloomy, with oil and industrial metals’ prices all falling, as the year’s stellar start for risk assets rapidly soured. U.S. crude oil fell 1.2 percent to settle at $63.39 a barrel, while Brent dropped 1.1% to settle at $66.86. Copper lost 1.30% to $7,075.85 a tonne. Gold prices fell 1.0% to a 2-1/2-week low. Spot gold was down 1.0% at $1,326.51 an ounce. U.S. Treasury debt prices were last down slightly. Earlier, volatile equity markets led investors to seek out lower-risk bonds, but many investors remained nervous after a week-long bond rout sent yields on Monday to four-year highs. Benchmark 10-year notes were last down slightly in price to yield 2.8054%, from 2.766% late on Monday. The original trigger for the U.S. stock market sell-off was a sharp rise in U.S. bond yields late last week, after data showed U.S. wages increasing at the fastest pace since 2009. That raised the alarm about higher inflation and, with it, potentially higher interest rates. “Once rates started moving, that kind of exposed some of these levered short VIX sales. A very crowded trade, it just took a while to unwind that,” said John Lynch, Chief Investment Strategist at LPL Financial in Charlotte, North Carolina. The U.S. dollar was barely up against a basket of currencies, paring gains as Wall Street rallied late. The dollar index last rose 0.13%, with the euro up 0.06% to $1.2384.
