By Wallace Witkowski, MarketWatch , Ryan Vlastelica

Material, tech shares among day's biggest gainers

The Dowi industrials and S&P 500 on Tuesday were poised for their best daily rise in about four months, as a surge in appetite for technology shares and health-care, underlined a measure of bullishness returning to markets after a rough patch.

Both the Dow and the S&P 500 were on track for their second straight daily gain, while the Nasdaq looked to snap a three-session skid.

The Dow Jones Industrial Average jumped about 200 points, or 0.9%, to 21,906, led higher by shares of Cisco Systems Inc.(CSCO), Apple Inc.(AAPL), Boeing Co.(BA) and Caterpillar Inc.(CAT). If gains hold, the blue-chip gauge will post its best daily point-and-percentage gain since April 25 (http://www.marketwatch.com/story/dow-industrials-150-point-surge-puts-benchmark-on-track-for-best-daily-gain-in-nearly-4-months-2017-08-22), according to FactSet data.

The S&P 500 index surged about 25 points, or 1%, to 2,453, putting the broad-market gauge on pace for its sharpest daily rise since April 24. The day's gains were broad, with all 11 primary S&P 500 sectors rising on the day. The biggest sector gainers were in tech (XLB), up 1.4%, and health care and materials (XLK), both 1.3% higher.

The tech-laden Nasdaq Composite Index rallied 85 points, or 1.3%, to 6,296, flirting with its best single-session climb since June 28.

Stocks gained momentum following a Politico report (http://www.politico.com/story/2017/08/22/trumps-team-and-lawmakers-making-strides-on-tax-reform-plan-241873) that President Donald Trump's top aides and congressional leaders are making progress on shaping a tax-reform plan.

Any progress on tax reform is a big part of Monday's rally, said Ian Winer, head of the equities division at Wedbush Securities, in an interview. Stocks, however, also gained support from reports that Norway's nearly $1 trillion sovereign-wealth fund (http://www.marketwatch.com/story/norways-sovereign-wealth-fund-tops-1-trillion-2017-08-22), the world's largest, was raising its exposure to stocks (https://www.bloomberg.com/news/articles/2017-08-22/world-s-biggest-wealth-fund-gains-26-billion-on-stock-rally).

(https://www.bloomberg.com/news/articles/2017-08-22/world-s-biggest-wealth-fund-gains-26-billion-on-stock-rally) "With the sovereign fund of Norway raising its equity allocation to 70% from 60%, that's a big deal when you're talking about a $1 trillion fund," said Winer, who added that this could ultimately signal a top for stocks, but that remains to be seen.

U.S. stock indexes are attempting to rally from successive bruising weekly declines that have tested investor confidence in the market's bull run, as political strife besetting President Donald Trump's administration and the threat of military conflagrations in the Korean Peninsula rattles nerves.

David Morrison, market strategist at Spread Co, in a post online (https://www.fxstreet.com/analysis/european-us-indices-indicate-stronger-open-201708220706). said for now, "it looks as if traders are taking advantage of the recent selloff to buy the dips, in tried and tested manner."

"The question is if it will work as well now as it has in the past," he said.

Read: A problem for buy-the-dip investors: no dips to buy (http://www.marketwatch.com/story/a-problem-for-buy-the-dip-investors-no-dips-to-buy-2017-08-08)

The resurgence, however, has reignited concerns about the buy-the-dip mentality that bears argue has helped to inflate equity values.

"Valuations, as we all know, are in the sky," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co. "But they don't tell you the direction of the market. What they tell you is the level of risk in the market, and investor psychology. That people are buying here suggests there's long-term optimism, although there's also vulnerability."

Read:'Bull market check list remains intact' despite pullback, Morgan Stanley says (http://www.marketwatch.com/story/bull-market-check-list-remains-intact-despite-pullback-morgan-stanley-says-2017-08-21)

Jackson Hole: Traders were already focusing on the Kansas City Federal Reserve Bank's central bank symposium in Jackson Hole, Wyo., which starts Thursday and runs through Saturday. Federal Reserve Chairwoman Janet Yellen and European Central Bank President Mario Draghi are among top speakers, with investors hoping to get hints on the future monetary policy path from both institutions.

"The conference has in recent years been a venue for big news in monetary policy, but this time around it is likely to be undramatic," wrote UBS economists in a note.

"We expect [Yellen's] speech to keep to well-trod financial stability topics--some excesses may exist, but the system is safe--and eschew discussion of potential near-term policy actions," they said.

Yellen and Draghi are both slated to speak on Friday.

The U.S. dollar was flat on Tuesday ahead of the speeches, with the ICE Dollar Index at 93.55.

Stock movers: Shares of Nordson Corp.(NDSN) tumbled 11% after the industrial machinery company's outlook fell short of Wall Street estimates (http://www.marketwatch.com/story/nordson-shares-fall-on-outlook-after-earnings-beat-2017-08-21).

Chevron Corp. (CVX) shares rose 0.6% following a report (http://www.marketwatch.com/story/chevron-ceo-john-watson-to-step-down-wsj-2017-08-22-13912733) that Chief Executive John Watson was stepping down.

Freeport-McMoRan Inc.(FCX) shares rose 2.4%, boosting material names, while in tech semiconductors made gains with Applied Materials Inc. (AMAT) up 2.7% and Advanced Micro Devices Inc. (AMD) climbing 0.9%.

Medtronic PLC (MDT) shares slipped 2% after it reported quarterly sales that fell short of forecast.

Tronc Inc.(TRNC) shares rallied 5.9% after the media company announced a management shake-up (http://www.marketwatch.com/story/tronc-shares-gain-8-after-company-names-new-la-times-publisher-2017-08-22) at the Los Angeles Times.

Pandora Media Inc.(P) shares rose 5.7% after a Morgan Stanley analyst said the online music service should benefit from focusing on its core business.

Toll Brothers Inc.(TOL) reported third-quarter earnings that beat expectations (http://www.marketwatch.com/story/toll-brothers-profit-beats-estimates-as-sales-fall-slightly-short-2017-08-22), though sales came in below forecasts. The stock declined 3.3%.

Shares of Coty Inc. (COTY) fell 12% after the beauty-products company reported fourth-quarter results that missed Wall Street expectations.

DSW Inc.(DSW) shares jumped 18% and were on track for their best single-session climb (http://www.marketwatch.com/story/dsws-stock-surge-puts-it-on-track-for-best-daily-gain-since-its-2005-public-debut-2017-08-22)since going public in 2005, on solid quarterly earnings

After the market closes on Tuesday, results are expected from Salesforce.com Inc.(CRM) and Intuit Inc.(INTU). Read a preview of Salesforce earnings: Looking to e-commerce, AI for growth as Dreamforce approaches (http://www.marketwatch.com/story/salesforce-earnings-looking-to-e-commerce-ai-for-growth-as-dreamforce-approaches-2017-08-21)

U.S.-listed shares of Australian-based BHP Billiton Ltd.(BHP.AU) rose 1.4% after the mining giant said it swung to a full-year profit (http://www.marketwatch.com/story/bhp-billiton-swings-to-profit-to-hike-dividend-2017-08-22) and it plans to sell its U.S. shale business.

Other markets:Asian stock markets closed mainly higher (http://www.marketwatch.com/story/singapore-ends-5-day-slump-leads-asian-market-gains-2017-08-21), with Singapore's FTSE Straits Times Index ending a five-session losing streak.

European markets finished in positive territory (http://www.marketwatch.com/story/european-stocks-set-to-snap-losing-streak-as-miners-jump-2017-08-22), after three straight sessions of losses.

Oil prices settled up 0.6% at $47.83 a barrel on a decline in U.S. supply (http://www.marketwatch.com/story/oil-prices-rebound-ahead-of-us-supply-data-2017-08-22), while metal prices mostly declined after recent run-ups, with gold (http://www.marketwatch.com/story/gold-struggles-to-reclaim-1300-despite-safe-haven-underpinnings-2017-08-22) settling down 0.4% to $1,291 an ounce.

--Sara Sjolin in London contributed to this article.

(END) Dow Jones Newswires

August 22, 2017 15:55 ET (19:55 GMT)