Bargain Hunting Contributes To Early Strength On Wall Street - U.S. Commentary

(RTTNews) - With traders picking up stocks at reduced levels, stocks have moved mostly higher in early trading on Tuesday. The major averages have all climbed firmly into positive territory but remain well off their recent highs.

The major averages have pulled back well off their highs for the young session but are currently holding on to moderate gains. The Dow is up 52.52 points or 0.3 percent at 17,648.87, the Nasdaq is up 21.60 points or 0.4 percent at 4,980.07 and the S&P 500 is up 5.93 points or 0.3 percent at 2,063.57.

The early strength on Wall Street is partly due to bargain hunting following yesterday's sell-off, which pulled the Dow down to its lowest closing level in almost five months.

The S&P 500 also ended the previous session at its worst closing level in three months, while the Nasdaq dropped to a nearly two-month closing low.

Continued concerns about Greece have helped to limit the upside for the markets, however, as the debt-laden country appears set to default on a 1.55 billion euro payment due to International Monetary Fund later today.

Reports had suggested that Greece and its creditors might open a new round of negotiations, but German Chancellor Angela Merkel said any new talks would have to wait until after a Greek referendum on Sunday.

Strategists at Bank of America Merrill Lynch said, "Greece continues to dominate the headlines again, with a surprising referendum likely to drive near-term sentiment."

"Still, for our broader macro view, we continue to expect robust U.S. growth, a stronger U.S. dollar and a Fed rate hike in September," they added.

With the focus on Greece, traders have largely shrugged off the latest batch of U.S. economic data, including reports on home prices, consumer confidence and Chicago-area business activity.

Airline stocks have shown a strong move back to the upside on the day, with the NYSE Arca Airline Index surging up by 1.9 percent after plunging by 3.5 percent on Monday.

Biotechnology, trucking, and brokerage stocks are also regaining some ground, while weakness is visible among gold and steel stocks.

In overseas trading, stock markets across the Asia-Pacific region showed notable rebounds during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.6 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index has fallen by 0.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 0.8 percent and 0.9 percent, respectively.

In the bond market, treasuries are giving back some ground after moving sharply higher in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 2.344 percent.