After moving sharply lower over the course of the previous session, stocks showed a strong move back to the upside during trading on Tuesday. The markets benefited from bargain hunting following yesterday's sell-off as well as a pullback by Spanish bond yields.
The major averages saw continued strength going into the close, ending the day near their highs for the session. The Dow jumped 162.57 points or 1.3 percent to 12,573.80, the Nasdaq advanced 33.34 points or 1.2 percent to 2,843.07 and the S&P 500 surged up 15.25 points or 1.2 percent at 1,324.18.
The strength on Wall Street came as some traders looked to pick up stocks at reduced levels following the steep losses that were posted in the previous session.
While stocks saw a strong upward move last week, the markets remain at relatively low levels following the substantial drop that was seen throughout the month of May.
Traders also continued to digest news of a bailout for Spain, which has requested 100 billion euros from a euro area bailout fund in order to shore up its banking system.
The Spanish ten-year bond yield hit a euro-era high during the day, but a pullback going into the close also contributed to the buying interest on Wall Street.
On the U.S. economic front, the Labor Department released its report on import and export prices in the month of May, showing a 1.0 percent drop in import prices and a 0.4 percent decrease in export prices.
The drop in import prices, which compared to economist estimates for a 1.1 percent decrease, was largely due to a 4.2 percent decrease in prices for fuel imports.
Among individual stocks, shares of Texas Instruments (TXN) rose by 2.1 percent after the chip maker narrowed its second quarter guidance. The company now expects earnings of $0.32 to $0.36 per share on revenues of $3.28 to $3.42 billion.
Juniper Networks (JNPR) also ended the day higher after announcing a new stock buyback program to purchase up to $1 billion worth of its stock in addition to the $1 billion it approved in 2010.
Meanwhile, shares of FactSet Research Systems (FDS) tumbled 12.3 percent after the financial information company reported better than expected third quarter earnings but provided disappointing fourth quarter guidance.
Most of the major sectors showed strong moves to the upside, reflecting the broad based buying interest that emerged over the course of the trading day.
Electronic storage stocks posted particularly strong gains, driving the NYSE Arca Disk Drive Index up by 3.3 percent. Quantum (QTM) and STEC (STEC) turned in two of the sector's best performances.
Significant strength was also visible among gold stocks, which moved higher along with the price of the previous metal. With gold for August delivery climbing $17 to $1,613.80 an ounce, the NYSE Arca Gold Bugs Index rose by 2.5 percent.
Railroad stocks also saw considerable strength on the day, resulting in a 2.5 percent gain by the Dow Jones Railroads Index. Telecom, semiconductor, and banking stocks also posted notable gains.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, partly offsetting Monday's strong gains. Japan's Nikkei 225 Index fell by 1 percent, while Hong Kong's Hang Seng Index ended the day down by 0.4 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced 0.8 percent, the German DAX Index rose 0.3 percent, and the French CAC 40 Index edged up 0.1 percent.
In the bond market, treasuries moved back to the downside after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 6.1 basis points to 1.661 percent.
U.S. economic data may be in focus on Wednesday, with traders likely to keep a close eye on reports on retail sales and producer prices.
by RTT Staff Writer
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