NEW YORK ( TheStreet) -- Major U.S. stock markets jumped Tuesday as hedge fund manager David Tepper's bullish comments about stocks offset worries about the Federal Reserve's scaling back on monetary stimulus. The S&P 500 was up 1% to 1,650.34. Tepper, the head of Appaloosa Management, praised the U.S. bank sector and sent Bank of America ( BAC ) up 2.8% to $13.34 while Citigroup ( C ) gained 2.4% to $50.09. "They call it the Tepper-effect ... endorsing this market move higher, but also you had the National Federation of Independent Business survey come out and ... it was the highest level in six months,"said Quincy Krosby, market strategist at Prudential Financial. "The Fed obviously has to think about an exit strategy ... but fears have been assuaged regarding the Fed's motives." The Dow Jones Industrial Average was up 0.8% to 15,215.25 while the Nasdaq was up 0.7% to 3,462.61. The NFIB reported Tuesday that its small business confidence index in April jumped to 92.1 from the prior week's 89.5, which proved to be another positive economic indicator from last month. Philadelphia Fed President Charles Plosser, speaking at the Center for Business and Policy Studies in Stockholm, said that the U.S. central bank should scale back its bond-buying. "I believe that labor market conditions warrant scaling back the pace of purchases as soon as our next meeting," said Plosser in prepared remarks. "Moreover, unless we see a significant reversal in current trends that jeopardizes my forecast of near 7% unemployment rate by the end of this year, then I anticipate that we could end the program before year-end." Tepper took a different view of Fed bond-buying, saying that concerns the bank will wind-down its bond-buying were overstated. "If the Fed doesn't taper back, we're going to get into this hyper-drive market," Tepper said. "It's a backwards argument. To keep the markets going up at a steady pace the Fed has to taper back." "I'm definitely bullish," he added. "I'm still a bull in this country ... guys that are short, they better have a shovel to get themselves out of the grave."
Sony ( SNE ) jumped 9.9% to $20.76 after the electronics company said its entertainment businesses aren't for sale despite a proposal from activist hedge fund investor Daniel Loeb of Third Point that the Tokyo-based company spin-off its entertainment unit. The Bureau of Labor Statistics said early Tuesday that U.S. import prices fell 0.5% in April, as expected by economists, following a 0.2% decrease in March. Lower prices for both fuel and non-fuel imports contributed to the declines each month. Prices for U.S. exports decreased by a more-than-expected 0.7% in April after a 0.5% decline in March. Economists were expecting a fall of 0.5%. "U.S stocks do not want to hear too much good news," Nicholas Colas, chief market strategist at ConvergEx Group, a global brokerage company based in New York, said in an investor note. "A big jobs number? Please, no ... That would mean the Federal Reserve might reduce its liquidity measures and that would mean higher interest rates and less money moving into stocks." Dean Foods ( DF ) was a big mover as it rose 3.8% to $19.88 after Montgomery Scott analysts raised their view on the stock to "buy" from "neutral," writing that its move to spin off White Wave will help the company sharpen its focus and realize more financial flexibility. Edwards Lifesciences ( EW ) gained 6.3% to $71.57 after the biggest maker of aortic heart valves said that Chief Financial Officer Thomas Abate plans to retire later this year and that its board had approved a new program to acquire up to an additional $750 million of the company's outstanding common shares. The company also said that Chairman and CEO Michael Mussallem will make a $5 million cash purchase of newly issued shares of Edwards common stock. The Mannheim-based ZEW Center for European Economic Research reported Tuesday that its index on German investor sentiment rose to 36.4 in May from 36.3 in April, missing the average economist forecast of 38.3, according to a Thomson Reuters poll. Other reports weighing on sentiment Tuesday morning were Chinese media reports suggesting that the country is poised to reduce its official growth target to 7% from 7.5%.