U.S. Stocks Continue To Turn In Strong Performance
Stocks showed a notable move to the upside early in the session on Tuesday and continued to turn in a strong performance in afternoon trading. With the advance, the major averages are adding to the gains posted in the previous session.
Currently, the major averages all remain firmly positive. The Dow is up 179.63 points or 0.6 percent at 32,424.21, the Nasdaq is up 138.20 points or 1.2 percent at 11,813.74 and the S&P 500 is up 35.48 points or 0.9 percent at 3,987.05.
The early rally on Wall Street partly reflected easing concerns about turmoil in the financial sector following recent steps taken to rescue distressed banks in the U.S. and Europe.
Positive sentiment was also generated in reaction to remarks by Treasury Secretary Janet Yellen, who said the government is prepared to once again take action to protect bank depositors if smaller lenders are threatened.
In remarks prepared to the American Bankers Association, Yellen addressed recent steps taken to protect depositors following the failures of Silicon Valley Bank and Signature Bank.
“The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader U.S. banking system,” Yellen said.
She continued, “And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”
Meanwhile, traders continue to look ahead to the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday.
While the recent banking turmoil led to some speculation the Fed may leave interest rates unchanged, CME Group’s FedWatch Tool is currently indicating an 86.4 percent chance of a 25 basis point rate hike.
Banking stocks continue to turn in some of the market’s best performances on the day, driving the KBW Bank Index up by 5.7 percent. The index continues to regain ground after ending last Friday’s trading at its lowest closing level in well over two years.
Substantial strength also remains visible among oil service stocks, as reflected by the 3.7 percent surge by the Philadelphia Oil Service Index.
The rally by oil service stocks comes as crude oil for April delivery is jumping $1.56 to $69.20 a barrel, extending the rebound seen in the previous session.
Brokerage stocks also continue to see considerable strength on the day, resulting in a 3.3 percent jump by the NYSE Arca Broker/Dealer Index.
Airline, steel and computer hardware stocks have also moved notably higher, while gold and utility stocks are seeing significant weakness.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index climbed by 0.6 percent, while Hong Kong’s Hang Seng Index surged by 1.4 percent.
The major European markets also showed strong moves to the upside on the day. While the French CAC 40 Index jumped by 1.4 percent, the German DAX Index and the U.K.’s FTSE 100 Index both shot up by 1.8 percent.
In the bond market, treasuries are extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 10.8 basis points at 3.589 percent.
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