After surging early in the session, stocks gave back some ground over the course of the trading day on Tuesday but managed to close firmly positive. The major averages added to the strong gains posted on Monday, further offsetting recent weakness.
The Dow pulled back well off its early high but still ended the day up 337.98 points or 1.1 percent at 30,523.80, its best closing level in almost a month. The Nasdaq advanced 96.60 points or 0.9 percent to 10,772.40 and the S&P 500 jumped 42.03 points or 1.1 percent at 3,719.98.
The initial strength on Wall Street partly reflected a positive reaction to upbeat earnings news from companies like Goldman Sachs (GS) and Johnson & Johnson (JNJ)
Shares of Goldman Sachs jumped 2.3 percent after the financial giant reported third quarter results that beat analyst estimates on both the top and bottom lines.
Johnson & Johnson also reported better than expected third quarter results, although the healthcare giant moved modestly lower over the course of the session.
The upbeat results from Goldman Sachs and J&J have helped ease concerns about the strength of the earnings season.
Netflix (NFLX), United Airlines (UAL) and J.B. Hunt (JBHT) are among the companies due to report their quarterly results after the close of today’s trading.
“The banks have given Wall Street some reasons to be optimistic, but now the focus shifts to Netflix and sectors that are quickly making their way into a recession,” said Edward Moya, senior maker analyst at OANDA.
Big-name companies like Procter & Gamble (PG), IBM Corp. (IBM), Tesla (TSLA), AT&T (T) and American Express (AXP) are also due to report their results in the coming days.
In U.S. economic news, the Federal Reserve released a report showing industrial production increased by more than expected in the month of September.
The Fed said industrial production rose by 0.4 percent in September after edging down by a revised 0.1 percent in August.
Economists had expected industrial production to inch up by 0.1 percent compared to the 0.2 percent dip originally reported for the previous month.
Housing stocks turned in some of the market’s best performances on the day, resulting in a 2.7 percent spike by the Philadelphia Housing Sector Index.
The strength among housing stocks came even though the National Association of Home Builders released a report showing a continued deterioration in homebuilder confidence in the month of October.
Substantial strength was also visible among networking stocks, as reflected by the 2.6 percent surge by the NYSE Arca Networking Index.
Chemical stocks also saw considerable strength on the day, driving the S&P Chemical Sector Index up by 2.2 percent.
Airline, retail and utilities stocks also showed notable moves to the upside amid another day of broad based strength on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Japan’s Nikkei 225 Index jumped by 1.4 percent and Hong Kong’s Hang Seng Index surged by 1.8 percent, although China’s Shanghai Composite Index bucked the uptrend and edged down by 0.1 percent.
European stocks also moved to the upside on the day but closed well off their best levels. While the German DAX Index advanced by 0.9 percent, the French CAC 40 Index rose by 0.4 percent and the U.K.’s FTSE 100 Index inched up by 0.2 percent.
In the bond market, treasuries showed a lack of direction over the course of the session before closing modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.7 basis points to 3.998 percent.
The latest earnings news is likely to be in the spotlight on Wednesday, although traders are also likely to keep an eye on the Fed’s Beige Book.
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