NEW YORK, Oct. 18 (UPI) -- U.S. markets turned higher Tuesday despite an International Monetary Fund warning that austerity programs could cut into global demand.
In a report issued Monday, the IMF said cuts in government spending present the short-term risk that the global economy "tips into a downward spiral."
"Even in a less severe scenario, key advanced economies could suffer from a protracted period of low growth," the IMF said.
In addition, the U.S. producer price index released Tuesday said prices paid by manufacturers rose 0.8 percent in September, an inflation pace that is higher than the target set by the U.S. Federal Reserve.
But blue-chip stocks headed higher with financial firms leading the way. Bank of America shares rose 10.12 percent, while JPMorgan Chase shares rose 5.9 percent.
Banks are showing stronger-than-expected profits in the third quarter, despite lower revenues due to restrictions on overdraft fees and charges for debit card use at retail stores.
By close of trading on Wall Street, the Dow Jones industrial average added 180.05 points, 1.58 percent, to 11,577.05. The Standard & Poor's 500 index gained 24.52 points, 2.04 percent, to 1,225.38. The Nasdaq composite index tacked on 42.51 points, 1.63 percent, to 2,657.43.
On the New York Stock Exchange, 2,566 stocks advanced and 489 declined on a volume of 4.8 billion shares traded.
The benchmark 10-year treasury note fell 5/32 to yield 2.175 percent.
The euro rose to $1.3757 from Monday's $1.3737. Against the yen, the dollar rose to 76.86 yen from Monday's 76.83 yen.
In Tokyo, the Nikkei 225 index lost 1.55 percent, 137.67 points, to 8,741.91.
In London, the FTSE 100 index lost 0.48 percent, 26.35, to 5,410.35.
