After showing a lack of direction early in the session, stocks moved notably higher over the course of the trading day on Tuesday. The major averages all moved to the upside, with the tech-heavy Nasdaq joining the Dow and the S&P 500 in positive territory after an initial pullback.
The major averages pulled back off their highs going into the end of the day but still posted strong gains. The Dow jumped 664.18 points or 1.4 percent to 47,112.45, the S&P 500 (SPI:SP500) advanced 60.76 points or 0.9 percent to 6,765.88 and the Nasdaq climbed 153.59 points or 0.7 percent to 23,025.59.
With the upward move on the day, the major averages closed higher for the third straight session, further offsetting recent weakness.
The strength that emerged on Wall Street may have reflected renewed optimism about the outlook for interest rates following recent dovish comments from Federal Reserve officials as well as the latest U.S. economic data.
The Commerce Department released a report this morning showing retail sales in the U.S. increased by less than expected in September, while a separate report released by the Labor Department showed producer prices in the U.S. increased in line with estimates in September.
Meanwhile, payroll processor ADP released a report showing U.S. private sector employers shed an average of 13,500 jobs per week in the four weeks ending November 8th compared to an average loss of 2,500 jobs in the previous four-week period.
The Conference Board also released a report showing a substantial deterioration by U.S. consumer confidence in the month of November.
The report said the consumer confidence index tumbled to 88.7 in November from an upwardly revised 95.5 in October. Economists had expected the consumer confidence index to dip to 93.3 from the 94.6 originally reported for the previous month.
CME Group’s FedWatch Tool indicates the chances the Fed will cut interest rates by another quarter point next month have surged to 82.7 percent from 50.1 percent a week ago.
Sector News
Housing stocks moved sharply higher over the course of the session, driving the Philadelphia Housing Sector Index up by 4.2 percent to its best closing level in almost a month.
The rally by housing stocks came after the National Association of Realtors released a report showing an unexpected jump by pending home sales in the month of October.
Substantial strength was also visible among airline stocks, as reflected by the 3.9 percent surge by the NYSE Arca Airline Index.
Pharmaceutical, healthcare and networking stocks also saw significant strength, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while Hong Kong’s Hang Seng Index and China’s Shanghai Composite Index advanced by 0.7 percent and 0.9 percent, respectively.
The major European markets have also moved to the upside on the day. While the German DAX Index is up by 1.0 percent, the French CAC 40 Index is up by 0.9 percent and the U.K.’s FTSE 100 Index is up by 0.8 percent.
In the bond market, treasuries extended the upward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 3.6 basis points to a nearly one-month closing low of 4.002 percent.
Looking Ahead
Trading activity on Wednesday may be somewhat subdued due to the Thanksgiving Day holiday on Thursday, although reports on durable goods orders and weekly jobless claims are still likely to attract attention.
SOURCE: RTTNEWS