Stocks Show Substantial Move To The Upside - U.S. Commentary

(RTTNews) - Following the lackluster performance seen in the previous session, stocks moved sharply higher over the course of the trading day on Tuesday. The tech-heavy Nasdaq rebounded strongly after ending the previous session at its lowest closing level in well over a month.

The major averages ended the day just off their highs of the session. The Dow advanced 196.14 points or 0.9 percent to 21,899.89, the Nasdaq surged up 84.35 points or 1.4 percent to 6,297.48 and the S&P 500 jumped 24.14 points or 1 percent to 2,452.51.

Strength overseas contributed to the buying interest on Wall Street amid easing concerns about recent political turmoil in Washington.

The upward move was also partly attributed to a positive reaction to President Donald Trump's speech outlining his new strategy for Afghanistan.

Trump hinted at an increase in U.S. military forces in Afghanistan but stressed that he would not discuss specific troop levels.

The president began his remarks with a call for national unity in what has been seen as an effort to quell the furor over his response to the recent violence in Charlottesville, Virginia.

The rally by stocks also came after a report from Politico said Trump's top aides and congressional leaders have made significant strides in shaping a tax overhaul.

Boeing (BA) contributed to the upward move by the Dow, climbing by 1.7 percent after being awarded a $349 million U.S. Air Force contract for work on the nation's next intercontinental ballistic missile.

Additionally, shares of DSW (DSW) moved sharply higher after the shoe retailer reported second quarter results that beat estimates on both the top and bottom lines.

Restaurant chain Ruby Tuesday (RT) also posted a substantial gain after reporting its fourth quarter results and announcing a plan to address its sales and operational challenges and improve profitability.

On the other hand, shares of Toll Brothers (TOL) moved to the downside after the luxury home builder reported fiscal third quarter earnings that beat estimates but on weaker than expected sales.

Sector News

Biotechnology stocks showed a substantial move to the upside, driving the NYSE Arca Biotechnology Index up by 2.1 percent. The index climbed further off the two-month closing low set last Friday.

Blueprint Medicines (BPMC) helped to lead the biotechnology sector higher on the day, surging up by 12.6 percent.

Considerable strength was also visible among railroad stocks, as reflected by the 2 percent jump by the Dow Jones Railroads Index. FreightCar America (RAIL) and CSX Corp. (CSX) posted notable gains.

Steel stocks also turned in a particularly strong performance, resulting in a 2 percent spike the NYSE Arca Steel Index.

Electronic storage, internet, semiconductor, and software stocks also saw notable strength, while some weakness was visible among airline and gold stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Hong Kong's Hang Seng Index advanced by 0.9 percent, and China's Shanghai Composite Index crept up by 0.1 percent. However, Japan's Nikkei 225 Index bucked the uptrend.

The major European markets showed notable moves back to the upside following recent weakness. While the German DAX Index jumped by 1.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.9 percent.

In the bond market, treasuries gave back ground after trending higher over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.5 basis points to 2.215 percent.

Looking Ahead

After a couple of relatively quiet days on the U.S. economic front, trading on Wednesday may be impacted by reaction to a report on new home sales.

New home sales are expected to inch up to an annual rate of 612,000 in July after rising to an annual rate of 610,000 in June.

On the earnings front, Intuit (INTU), La-Z-Boy (LZB), and Salesforce.com (CRM) are among the companies releasing their quarterly results after the close of today's trading.

Lowe's (LOW), America Eagle (AEO), and Express (EXPR) are also among the companies due to report their results before the start of trading on Wednesday.