Earnings Optimism Leads To Continued Strength On Wall Street – U.S. Commentary

Following the rally seen in the previous session, stocks saw some further upside during trading on Tuesday. With the upward move on the day, the S&P 500 reached its best closing level in five months.

The major averages all closed in positive territory, although the Nasdaq inched up just 3 points or less than a tenth of a percent to 7,759.20. The Dow climbed 143.07 points or 0.6 percent to 24,919.66 and the S&P 500 rose 9.67 points or 0.4 percent to 2,793.84.

The continued strength on Wall Street came as optimism about the upcoming earnings season overshadowed recent trade concerns.

Snack food and beverage giant PepsiCo (PEP) released its second quarter results before the start of trading, reporting earnings that exceeded analyst estimates.

Financial giants Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC) are due to report their quarterly results before the start of trading on Friday.

Another light day on the U.S. economic front kept some traders on the sidelines, however, with closely watched reports on producer and consumer price inflation due to be released in the coming days.

Oil service stocks showed a strong move to the upside on the day, driving the Philadelphia Oil Service Index up by 1.1 percent.

The strength among oil service stocks came amid an increase by the price of crude oil, with crude for August delivery rising $0.26 to $74.11 a barrel.

Chemical, semiconductor, and utilities stocks also turned in strong performances, while most of the other major sectors showed more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index climbed by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries fluctuated over the course of the session before closing modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.3 basis points to 2.873 percent.

Looking Ahead

Following a couple of quiet days on the U.S. economic front, trading on Wednesday may be impacted by reaction to a report on producer prices in the month of June.

by RTTNews Staff Writer

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