Stocks continue to see modest strength in afternoon trading on Tuesday, extending the upward move seen over the past few sessions. While buying interest has remained somewhat subdued, the major averages have once again reached their best intraday levels in well over a year.
Currently, the major averages are hovering near their best levels of the day. The Dow is up 111.90 points or 0.3 percent at 36,516.83, the Nasdaq is up 50.16 points or 0.4 percent at 14,482.64 and the S&P 500 is up 9.75 points or 0.2 percent at 4,632.19.
The modest strength on Wall Street comes following the release of a highly anticipated Labor Department report showing U.S. consumer prices inched up in line with economist estimates in the month of November.
The Labor Department said its consumer price index crept up by 0.1 percent in November after coming in unchanged in October. The uptick matched expectations.
Excluding food and energy prices, core consumer prices rose by 0.3 percent in November after edging up by 0.2 percent in October. The increase in core prices also came in line with estimates.
The report also said the annual rate of consumer price growth slipped to 3.1 percent in November from 3.2 percent in October, while the annual rate of core consumer price growth was unchanged at 4.0 percent.
The data has added to optimism about the outlook for interest rates ahead of the Federal Reserve’s monetary policy announcement on Wednesday, although traders seem reluctant to make more significant moves.
While the Fed is widely expected to leave interest rates unchanged, traders will be looking to the accompanying statement and projections for signs the central bank could begin cutting rates next year.
“The market remains steadfast in its belief that the Fed will cut rates as early as this spring, although the Fed may want to keep its options open if its campaign to quell inflation hasn’t completed the more difficult ‘last mile,'” said Quincy Krosby, Chief Global Strategist for LPL Financial.
She added, “The Fed statement in concert with the ‘dot plot,’ coupled with Powell’s comments, should offer markets more clarity and hopefully less confusion over the Fed’s path towards price stability.”
Despite the uptick by the broader markets, gold stocks have shown a substantial move to the downside, dragging the NYSE Arca Gold Bugs Index down by 3.3 percent.
The continued weakness among gold stocks comes amid a slight decrease by the price of the precious metal, with gold for February delivery edging down $0.50 to $1,993.20 an ounce.
Energy stocks are also significant weakness on the day, as the price of crude oil for January delivery has plunged $2.95 to $68.37 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 1.6 percent, while the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index are both down by 1.5 percent.
On the other hand, biotechnology stocks have shown a notable move to the upside, driving the NYSE Arca Biotechnology Index up by 1.1 percent to a two-month intraday high.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index crept up by 0.2 percent, while Hong Kong’s Hang Seng Index jumped by 1.1 percent.
Meanwhile, European stocks moved slightly lower over the course of the session. While the French CAC 40 Index edged down by 0.1 percent, the U.K.’s FTSE 100 Index and the German DAX Index both closed just below the unchanged line.
In the bond market, treasuries have given back ground after an early jump but are currently in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.9 basis points at 4.210 percent.
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