NEW YORK – The stock market is desperately looking for good news.
On Tuesday, oil prices fell, the euro sank to a 22-month low, and the yield on the U.S. government’s 10-year Treasury note fell near a historic low after a report suggested that Spain will have more trouble repaying its debts.
But stocks rose anyway. In fact, they had one of their best days in an otherwise dreary month. Investors focused on hopes that China is poised to rev up its economic growth machine and that upcoming elections in Greece will help the country stay in the euro.
“The overriding news isn’t that great,” said Robert Pavlik, chief market strategist at investment advisors Banyan Partners. “But Greece and China are taking the pressure off the market in the short term.”
Gains in industrial stocks that depend heavily on the Chinese economy, like Caterpillar and Alcoa, helped push the Dow Jones industrial average up 125.86 points. The Dow closed at 12,580.69, up 1 percent.
China is the largest market for aluminum, which Alcoa makes, and Caterpillar recently said it is aggressively courting China to sell its construction equipment. Both stocks gained 3 percent.
It was only the fifth gain for the Dow this month. The index is down 4.8 percent for May and is headed for its first monthly loss since September. The main culprits behind the decline have been the increasing likelihood that Greece will drop out of the euro currency and a worsening of Spain’s financial condition.
Facebook plunged 10 percent to $28.84, shaving $25 billion off from the company’s market value in its first seven days of trading. The glitch-plagued IPO has drawn scrutiny from regulators and ire from disgruntled investors who had trouble executing trades.
Blackberry maker Research in Motion plunged 11 percent in after-hours trading to $10 after the company said it expects to post a loss in its first quarter amid tough competition in the smartphone business.
The Standard & Poor’s 500 index closed up 14.60 points at 1,332.42, and the Nasdaq composite added 33.46 points to 2,870.99.