Stocks have moved to the upside in early trading on Tuesday, regaining some ground after ending the previous session sharply lower. The major averages have moved firmly into positive territory, partly offsetting Monday's steep losses.
The major averages have pulled back off their highs for the young session in the past few minutes but are holding on to gains. The Dow is up 21.72 points or 0.2 percent at 12,524.38, the Nasdaq is up 15.29 points or 0.5 percent at 2,851.45 and the S&P 500 is up 4.68 points or 0.4 percent at 1,851.45.
Bargain hunting has contributed to the early strength on Wall Street, with some traders picking up stocks at reduced levels following Monday's sell-off.
Nonetheless, stocks remain well off their recent highs, as lingering concerns about the ongoing European debt crisis have helped to keep buying interest somewhat subdued.
Reflecting the continued troubles in Europe, ratings agency Moody's downgraded the long-term debt and deposit ratings for 28 Spanish banks. The downgrades came after Spain formally asked for a bailout to shore up its ailing banking sector.
Moody's noted that the downgrades follow the weakening of the Spanish government's creditworthiness and also reflect the lowering of most of the banks' standalone credit assessments.
Housing stocks are seeing notable strength following the release of a report from Standard & Poor's showing a bigger than expected increase in home prices in April.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index rose by a seasonally adjusted 0.7 percent in April, matching the upwardly revised increase in March.
Economists had expected home prices to rise by 0.4 percent compared to the 0.1 percent increase originally reported for the previous month.
Early strength is also visible among computer hardware stocks, as reflected by the 1 percent gain being posted by the NYSE Arca Computer Hardware Index. Seagate Technology (STX) has helped to lead the sector higher on news that it is being added to the S&P 500.
Airline, biotechnology, and software stocks are also seeing early strength, while most of the major sectors are showing more modest moves.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's Nikkei 225 Index fell by 0.8 percent, Hong Kong's Hang Seng Index ended the day up by 0.5 percent.
Meanwhile, the major European markets have moved to the upside on the day. The U.K.'s FTSE 100 Index is up by 0.3 percent, while the German DAX Index and the French CAC 40 Index have both edged up by 0.1 percent.
In the bond market, treasuries are giving back some ground after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.2 basis points at 1.64 percent.
by RTT Staff Writer
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