Stocks moved mostly higher over the course of the trading day on Tuesday, extending the upward trend seen over the past several sessions. With the continued advance, the Dow and the S&P 500 reached their best closing levels in well over a month.
The major averages pulled back off their best levels going into the close but remained in positive territory. The Nasdaq jumped 121.08 points or 0.9 percent to 13,639.86, the S&P 500 climbed 12.40 points or 0.3 percent to 4,378.38 and the Dow rose 56.74 points or 0.2 percent to 34,152.60.
Profit taking contributed to the initial weakness on Wall Street, as some traders looked to cash in on the recent strength in the markets.
Selling pressure waned shortly after the start of trading, however, with continued optimism about the outlook for interest rates contributing to the subsequent rebound.
The rebound by stocks also came as treasury yields showed a notable move back to the downside after surging in the previous session.
Meanwhile, traders looked ahead to speeches by Federal Reserve Chair Jerome Powell on Wednesday and Thursday.
Powell is due to deliver opening remarks at the Division of Research and Statistics Centennial Conference on Wednesday and participate in a policy panel discussion before the 24th Jacques Polak Annual Research Conference on Thursday.
Traders are likely to pay close attention to Powell’s remarks, looking for additional confirmation the Fed will leave interest rates unchanged for the foreseeable future.
In U.S. economic news, a report released by the Commerce Department showed the U.S. trade deficit widened by more than expected in the month of September.
The Commerce Department said the trade deficit increased to $61.5 billion in September from a revised $58.7 billion in August.
Economists had expected the trade deficit to climb to $60.2 billion from the $58.3 billion originally reported for the previous month.
The wider than expected deficit came as the value of imports surged by 2.7 percent to $322.7 billion, while the value of exports jumped by 2.2 percent to $261.1 billion.
Sector News
Software stocks turned in a strong performance on the day, driving the Dow Jones U.S. Software Index up by 1.6 percent to its best closing level in well over three months.
Considerable strength was also visible among biotechnology stocks, with the NYSE Arca Biotechnology Index climbing by 1.2 percent.
Airline, retail and tobacco stocks also showed notable moves to the upside, while energy stocks moved sharply lower along with the price of crude oil.
With crude for December delivery plummeting $3.45 to $77.37 a barrel, the Philadelphia Oil Service Index plunged by 3.9 percent and the NYSE Arca Oil Index dove 2.4 percent.
Gold stocks also saw significant weakness amid a decrease by the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 2.7 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index tumbled by 1.3 percent, while Hong Kong’s Hang Seng Index dove by 1.7 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index inched up by 0.1 percent, the U.K.’s FTSE 100 Index edged down by 0.1 and the French CAC 40 Index fell by 0.3 percent.
In the bond market, treasuries showed a strong move back to the upside following the sharp pullback seen on Monday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled 9.1 basis points to 4.571 percent.
Looking Ahead
Powell’s speech is likely to be in focus on Wednesday, while results of the Treasury Department’s ten-year note auction may also attract attention, as they could impact treasury yields.
For comments and feedback contact: editorial@rttnews.com