Stocks Move Mostly Higher Amid Easing Concerns About Turkey – U.S. Commentary

Stocks moved notably higher over the course of the trading day on Tuesday after turning lower over the course of the previous session. The major averages all moved to the upside, with the Dow and the S&P 500 rebounding after closing lower for four consecutive sessions.

The major averages ended the day firmly in positive territory. The Dow rose 112.22 points or 0.5 percent to 25,299.92, the Nasdaq advanced 51.19 points or 0.7 percent to 7,870.89 and the S&P 500 climbed 18.03 points or 0.6 percent to 2,839.98.

The strength on Wall Street partly reflected easing concerns about the financial crisis in Turkey amid a rebound by the country’s currency.

The Turkish lira continued to recover from a record low after Turkey’s central bank pledged to provide liquidity and cut reserve requirements for banks.

Buying interest may also have been generated by a positive reaction to earnings news from Dow component Home Depot (HD).

Before the start of trading, Home Depot reported second quarter results that exceeded expectations and raised its full-year guidance.

However, traders seemed somewhat reluctant to make more significant moves ahead of the release of key reports on retail sales, industrial production, and housing starts in the coming days.

The Labor Department released a report this morning showing import prices were unchanged in the month of July, as a jump in prices for fuel imports was offset by a drop in prices for non-fuel imports.

The report said import prices were unchanged in July after edging down by a revised 0.1 percent in June. Economists had expected import prices to inch up by 0.1 percent.

Meanwhile, the report said export prices fell by 0.5 percent in July after rising by a downwardly revised 0.2 percent in June. Export prices had been expected to rise by 0.2 percent.

Sector News

Computer hardware stocks turned in some of the market’s best performances on the day, driving the NYSE Arca Computer Hardware Index up by 1.9 percent. The index bounced off a three-month closing low.

Significant strength also emerged among banking stocks, as reflected by the 1.4 percent gain posted by the KBW Bank Index. The advance by the index came after it closed lower for three straight days.

Tobacco, retail and telecom stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Meanwhile, gold stocks bucked the uptrend, dragging the NYSE Arca Gold Bugs Index down by 1.3 percent to its lowest closing level in well over two years.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 2.3 percent, while Hong Kong’s Hang Seng Index fell by 0.7 percent.

Meanwhile, the major European markets moved modestly lower on the day. While the German DAX Index closed nearly unchanged, the French CAC 40 Index edged down by 0.2 percent and the U.K.’s FTSE 100 Index dipped by 0.4 percent.

In the bond market, treasuries saw modest weakness, extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.8 basis points to 2.895 percent.

Looking Ahead

Following a couple of relatively quiet days on the U.S. economic front, trading on Wednesday may be impacted by reaction to a slew of data.

Traders are likely to keep an eye on reports on retail sales, labor productivity and costs, industrial production, and homebuilder confidence.

by RTTNews Staff Writer

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