By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market finished Tuesday
with the best gains this year as the S&P 500 closed at a record
high for the 49th time in the past 12 months.
Risk appetite returned after reports that Russian troops ended
military exercises in the border regions with Ukraine, easing
tensions that spooked investors the previous session.
The benchmark S&P 500 index and blue chips recorded their
best one-day percentage gains since Dec. 18, 2013.
The S&P 500 index (SPX) finished near session highs, adding
28.18 points, or 1.5%, to 1,873.91 at the close, with financials
and health-care sectors leading all 10 main sectors higher.
The Dow Jones Industrial Average (DJI) gained 227.85 points, or
1.4%, to 16,395.88, with all 30 components closing higher.
The Nasdaq Composite (RIXF) gained 74.67 points, or 1.8%, to
4,351.97, its best one-day point gain since Oct 10, 2013. The
tech-heavy index closed at the highest level since April 2000.
The Russell 2000 (RUT) index of small-cap stocks also closed at
a record high, adding 32.29 points, or 2.8% to 1,208.65.
Read the recap of our stock market live blog.
"The events such as yesterday trigger corrections in markets and
not bear markets," said Steven Krawick, chief investment officer at
West Chester Capital Advisors. "Economic conditions are still
favorable, the Fed is committed to keeping the rates low and while
we consider valuations as high, they are not at extreme levels.
With these underpinnings, selloffs such as yesterday are temporary
and provide an opportunity to buy."
With no economic reports scheduled, geopolitical news dominated
Tuesday's trading. Investors welcomed news that Russian President
Vladimir Putin ordered troops stationed on the border with Ukraine
back to base after the completion of military exercises.
International observers had become nervous over the exercises in
central and western Russia because they have been used in the past
as a cover for military action.
Meanwhile, President Barack Obama said a Putin news conference
earlier Tuesday was just a smoke screen to justify an illegal
invasion.
Among individual stocks, Delta Air Lines Inc. (DAL) climbed 5.7%
after the airline on Tuesday said its consolidated passenger unit
revenue in February increased 4% year over year on strong domestic
demand.
Lorillard Inc. (LO) rose 3.1% in the wake of a Financial Times
report that Reynolds American Inc. (RAI), maker of Camel brand
cigarettes, is exploring a possible buyout of Lorillard in a deal
that could value Lorillard at more than $20 billion. Shares of
Reynolds were up 5.7%.
Shares of Oxygen Biotherapeutics Inc. (OXBT) surged 15% after
the pharmaceutical company said Tuesday the U.S. Food and Drug
Administration has allowed it to go ahead with testing of its
Oxycyte treatment, which had been on clinical hold.
Plug Power Inc. (PLUGD) shares leapt 15% after analysts at Cowen
and Co. raised their price target on the firm on Monday.
J.C. Penney Co. Inc. (JCP) shares jumped 4.1% after Standard
& Poor's Ratings Services on Monday boosted its outlook on the
retailer to stable from negative.
Tesla Motors Inc. (TSLA) shares rose 1.7%. The electric-car
company Tuesday announced expansion plans in Europe. Adam Jonas, an
analyst at Morgan Stanley, said that Tesla could disrupt the energy
industry if its "gigafactory" can produce batteries at a cost that
is low enough. Morgan Stanley has an overweight rating and a price
target of $320 on Tesla shares. Shares have surged nearly 67% this
year through Monday's close.
RadioShack Corp. (RSH) tumbled 17% to $2.25 after the struggling
electronics retailer missed earnings estimates and said it would
close about one-fifth of its stores.
As stocks rallied, gold and oil prices pulled back from highs
seen on Monday. Gold for April delivery (GCJ4) fell 1.1%, and West
Texas Intermediate (CLJ4) crude fell 1.5%.
Asian shares had a mixed session, though Hong Kong's Hang Seng
Index , one of Asia's worst-hit markets on Monday, added 0.7%, and
Toyko shares also rose. Beaten-down European stocks rebounded; the
Stoxx Europe 600 index jumped 1.9%.
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