The Dow Jones Industrial Average is one of several indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. The downfall in stocks was brought on by rising bond yields and concerns regarding price growth, as USA interest rates are making their way back to levels seen before the financial crisis.
S&P 500 measures the performance of 500 widely held common stocks of large-cap USA companies.
CSRA Inc (NYSE:CSRA), a provider of information technology services to the U.S. government, opened sharply higher, up nearly a third at US$40.49 after its board gave the green light to a takeover by General Dynamics Corp (NYSE:GD) worth US$40.75 a share.
Following a slump into correction territory last week, the S&P 500 has recovered 3.2 percent in the past three session.
Technology companies, the leading sector over the past year, and banks fell the most. The Nasdaq and S&P 500 futures also indicated a negative start to Tuesday's trade. A drop of that size is known on Wall Street as a market "correction".
The stock market has dropped from its January 26 high of 26,567, with last week's sudden declines and volatile trading sparked by worries about a potential rise in USA inflation or interest rates. The yield on 2-year government bonds also rose to 2.077%.
The technological Nasdaq Composite rose by 1.6% to 6,981.96 points.
United States of America stocks moved sharply higher in early trading Friday, recouping some of the ground lost a day earlier when indexes plummeted, deepening a weeklong sell-off that knocked the market into a "correction" for the first time in two years.
The latest move higher follows news that the White House will unveil a long-awaited infrastructure plan that includes $200 billion in federal infrastructure spending over 10 years. The S&P 500, meanwhile, posted moves greater than 1 percent in four-of-five trading days last week.
The release this Wednesday of the Consumer Price Index for January will provide some more clarity on inflation. The combination of corporate tax changes and overseas economic growth should keep stocks moving higher, though likely in a more volatile environment, he said.
The Dow industrials were up 279 points, or 1.2 percent, to 24,471.
Following Wall Street's recent swings, the S&P 500 is down 0.4 percent for the year. Brent crude, used to price worldwide oils, lost 20 cents to $62.59 a barrel in London. On Monday Comcast stock slipped 15 cents to $38.42 while Disney lost 7 cents to $103.02. The yield on the 10-year Treasury note stayed at 2.86 percent.
The gold prices rose because of the depreciation of the dollar.