Dow Climbs To Highest Level In Over A Year But Nasdaq Giving Back Ground

Following the continued advance seen to start the week, the major U.S. stock indexes are turning in a mixed performance in morning trading on Tuesday. While the Dow and the S&P 500 are seeing further upside, the tech-heavy Nasdaq is giving back ground.

Currently, the Dow is up 270.39 points or 0.8 percent at 34,855.73, climbing to its best intraday level in well over a year. The S&P 500 is also up 9.80 points or 0.2 percent at 4,532.59, but the Nasdaq is down 32.75 points or 0.2 percent at 14,212.20.

The Dow is benefitting from a positive reaction to earnings news from big-name companies like Bank of America (BAC) and Morgan Stanley (MS).

Shares of Bank of America and Morgan Stanley are surging by 4.4 percent and 6.4 percent, respectively, after both financial giants reported second quarter results that exceeded analyst estimates on both the top and bottom lines.

The advance by the blue chip index also comes as shares of Verizon (VZ) are spiking by 4.6 percent after tumbling to their lowest levels in almost thirteen years on Monday.

The mixed performance by the broader markets comes following the release of separate reports showing a smaller than expected increase in retail sales and an unexpected decrease in industrial production.

While the reports have led to some concerns about the strength of the economy, the data has added to recent optimism about the Federal Reserve nearing the end of its interest rate hiking cycle.

The Commerce Department said retail sales edged up by 0.2 percent in June after climbing by an upwardly revised 0.5 percent in May.

Economists had expected retail sales to advance by 0.5 percent compared to the 0.3 percent growth originally reported for the previous month.

Excluding a modest increase in sales by motor vehicles and parts dealers, retail sales still rose by 0.2 percent in June after rising by an upwardly revised 0.3 percent in May.

Economists had expected ex-auto sales to increase by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the Fed said industrial production slid by 0.5 percent in June, matching the downwardly revised decrease in May.

Economists had expected production to come in unchanged compared to the 0.2 percent dip originally reported for the previous month.

Sector News

Financial stocks are seeing substantial strength following the upbeat earnings news, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index surging by 2.4 percent and 2.3 percent, respectively.

Significant strength is also visible among gold stocks, as reflected by the 2.4 percent jump by the NYSE Arca Gold Bugs Index. The strength in the sector comes as the price of gold for August delivery is spiking $29.20 to $1,985.60 an ounce.

Energy, transportation and telecom stocks are also seeing considerable strength on the day, while semiconductor stocks are giving back ground after yesterday’s rally.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index rose by 0.3 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has risen by 0.4 percent, the French CAC 40 Index is up by 0.3 percent and the German DAX Index is up by 0.2 percent.

In the bond market, treasuries are extending the upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.9 basis points at 3.758 percent.

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