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Dow, S&P Close at Record High as Brexit Fears Ease

U.S. stocks closed higher Tuesday as fears eased over Brexit and Japan signaled more economic stimulus.
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U.S. stocks closed higher Tuesday as fears eased over Brexit and Japan signaled more economic stimulus.

"I think the things that people were worried about, ... sort of faded into the background," said Greg Zappin, managing director and portfolio manager at Penn Mutual Asset Management. "You have a lot of things conspiring to make this a very benign investing environment.

The S&P 500 moved higher in record territory and the Dow Jones industrial average closed at a new all-time high.

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The blue-chips index reached the milestone on the heels of the S&P 500 closing at an all-time high Monday. On Tuesday, the Dow closed about 120 points higher, with Goldman Sachs contributing the most gains.

The S&P 500 closed 0.7 percent higher, led by a more than 2 percent rise in energy. U.S. crude settled 4.56 percent higher, at $46.80 a barrel, after falling more than 1 percent Monday.

"I think people are getting more comfortable within the growth area of the market," said Robert Pavlik, chief market strategist at Boston Private Wealth. "I definitely see more of a risk-on mentality. People are foregoing the yield plays for the growth parts of the market."

The Nasdaq also rose about 0.7 percent to close in positive territory for 2016.

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"I think the fears of Brexit have subsided, but I think that's premature," said Maris Ogg, president at Tower Bridge Advisors. "I'm glad the U.K. has gotten a new leader, ... but I don't think this will go away."

Interior Minister Theresa May is set to become the U.K.'s prime minister on Wednesday. Stock markets across the globe have risen sharply, after a steep sell-off, following the United Kingdom's decision to leave the European Union.

"In the past two weeks, post Brexit, the S&P 500 has vaulted over 8 percent," said Adam Sarhan, CEO at Sarhan Capital. "Typically, a 10 percent move for the entire year is considered normal."