Stocks Continue To Recover From Recent Sell-Off - U.S. Commentary

(RTTNews) - Extending the rebound seen over the course of last Friday's session, stocks moved sharply higher during trading on Tuesday. With the upward move, the major averages further offset the steep drop seen throughout much of last week.

The major averages ended the session at their best levels of the day. The Dow jumped 222.57 points or 1.4 percent to 16,196.41, the Nasdaq soared 98.44 points or 2.3 percent to 4,435.96 and the S&P 500 surged up by 30.80 points or 1.7 percent to 1,895.58.

The broad based rally on Wall Street came as traders continued to pick up stocks at reduced levels following recent weakness.

Bargain hunting helped the markets to regain some ground during trading last Friday, but the major averages continued to show substantial weakness for the new year.

The Dow ended last Thursday's trading at a two-year closing low, while the Nasdaq and the S&P 500 were at their lowest closing levels in well over a year.

Traders also kept an eye on the price of crude oil, which once again experienced considerable volatility on the day.

Crude for March delivery closed down $0.40 at $29.04 a barrel after reaching as high as $31.53 a barrel and falling as low as $28.70 a barrel.

Meanwhile, traders largely shrugged off a report from the New York Federal Reserve showing that business activity for New York manufacturers has continued to decline in the month of February.

The New York Fed said its general business conditions index climbed to a negative 16.6 in February from a negative 19.4 in January, but a negative reading continues to indicate a contraction in regional manufacturing activity.

A separate report from the National Association of Home Builders showed an unexpected deterioration in homebuilder confidence in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 58 in February from an upwardly revised 61 in January.

The decrease came as a surprise to economists, who had expected the housing market index to inch up to 61 from the 60 originally reported for the previous month.

Sector News

Most of the major sectors moved notably higher on the session, reflecting another day of broad based buying interest on Wall Street.

Computer hardware stocks turned in a particularly strong performance, driving the NYSE Arca Computer Hardware Index up by 5.8 percent. The index climbed back toward the one-month closing high set earlier this month.

Cray (CRAY) helped lead the computer hardware sector higher, with the supercomputer manufacturer soaring by 19.7 percent.

Substantial strength was also visible among networking stocks, as reflected by the 3.5 percent gain posted by the NYSE Arca Networking Index. Juniper Networks (JNPR) and Ciena (CIEN) posted standout gains.

Brokerage stocks also moved significantly higher on the day, driving the NYSE Arca Broker/Dealer Index up by 3.4 percent. With the gain, the index climbed further off the two-year closing low set last Thursday.

Semiconductor, telecom, biotechnology, and steel stocks also saw considerable strength, while gold stocks bucked the uptrend amid a sharp pullback by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index advanced by 0.7 percent, the German DAX Index slumped by 0.8 percent and the French CAC 40 Index edged down by 0.1 percent.

In the bond market, treasuries pulled back further off their recent highs amid the strength on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3 basis points to 1.778 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to reports on housing starts, producer prices, and industrial production.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which could shed some light on the outlook for interest rates.