U.S. stocks rallied to a seven-week high after manufacturing in the world’s largest economy showed signs of stabilizing. Optimism that central banks from Asia to Europe will add to stimulus boosted emerging-market currencies and commodities, while Treasuries fell with gold.
The S&P 500 climbed 1.8 percent at 12:22 p.m. in New York, rebounding from a slide Monday that erased its gain for February. The index’s three-month decline is the longest since 2011, though its 7.6 percent surge since Feb. 11 has cut a loss in 2016 by more than half.
The Standard & Poor’s 500 Index rebounded from its third consecutive monthly decline, while European equities capped their longest rally since October. The yuan strengthened for the first time in eight days, while the Canadian dollar climbed after a report showed the nation’s economy unexpectedly grew in the fourth quarter. Crude fluctuated, while Treasury yields climbed.
Financial companies led stocks higher Tuesday with a 2.8 percent surge, the biggest gain in three weeks. Northern Trust Corp. climbed 4.8 percent and Legg Mason Inc. added 4.1 percent as all but two stocks in the group rallied.
Equities got a boost after data showed American factory activity in February shrank less than forecast as gains in new orders and production provided signs that the beleaguered industry could soon stabilize. Factories should also find a source of strength in domestic demand, which is being boosted by consumers with solid job gains and a nascent pickup in wage growth. A rebound in oil prices in the final two weeks of February also helped stabilize equity markets.