Stocks moved sharply higher during trading on Tuesday, more than offsetting the significant downturn seen over the course of the session on Monday. The major averages jumped early in the session and saw further upside as the day progressed.
The major averages ended the session just off their best levels of the day. The Dow surged 754.44 points or 2.4 percent to 31,827.05, the Nasdaq soared 353.10 points or 3.1 percent to 11,713.15 and the S&P 500 spiked 105.84 points or 2.8 percent to 3,936.69.
The rebound on Wall Street came as traders made another attempt at bargain hunting after the rally seen in early trading on Monday faded as the day progressed.
Optimism about upcoming earnings news was also cited as a reason for the rally, with a majority of the S&P 500 companies beating expectations so far this season.
Toymaker Hasbro (HAS) and oil services giant Halliburton (HAL) posted notable gains after reporting better than expected quarterly earnings.
On the other hand, shares of IBM Corp. (IBM) moved sharply lower after the tech giant reported better than expected second quarter results but lowered its cash flow forecast.
Healthcare giant Johnson & Johnson (JNJ) also moved to the downside after reporting second quarter results that beat analyst estimates but cutting its full-year guidance.
Meanwhile, traders largely shrugged off a report from the Commerce Department unexpectedly showing a continued decline in housing starts in the month of June.
The Commerce Department said housing starts slumped by 2.0 percent to an annual rate of 1.559 million after plunging by 11.9 percent to a revised rate of 1.591 million in May.
The continued decrease came as a surprise to economists, who had expected housing starts to jump by 2.3 percent to an annual rate of 1.585 million from the 1.549 million originally reported for the previous month.
With the unexpected decrease, housing starts dropped to the lowest annual rate since hitting 1.505 million in April of 2021.
The report showed building permits also fell by 0.6 percent to an annual rate of 1.685 million in June after tumbling by 7.0 percent to a rate of 1.695 million in May.
Building permits, an indicator of future housing demand, were expected to slump by 2.7 percent to an annual rate of 1.650 million.
Semiconductor stocks turned in some of the market’s best performances on the day, resulting in a 4.6percent spike by the Philadelphia Semiconductor Index.
Substantial strength was also visible among airline stocks, with the NYSE Arca Airline Index soaring by 4.1 percent.
Networking stocks also saw considerable strength on the day, resulting in a 3.8 percent surge by the NYSE Arca Networking Index.
Energy, chemical, brokerage and computer hardware stocks also showed strong moves to the upside, reflecting broad based buying interest on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while Hong Kong’s Hang Seng Index fell by 0.9 percent.
Meanwhile, the major European markets all showed strong moves to the upside on the day. While the German DAX Index spiked by 2.7 percent, the French CAC 40 Index surged by 1.8 percent and the U.K.’s FTSE 100 Index jumped by 1.0 percent.
In the bond market, treasuries have come under pressure amid the rally on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.2 basis points at 3.012 percent.
Earnings news is likely to remain in focus on Wednesday, with streaming giant Netflix (NFLX) among the companies releasing their quarterly results after the close of today’s trading.
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