Stocks have moved to the upside in early trading on Tuesday, adding to the gains posted in the two previous sessions. The major averages have climbed firmly into positive territory after ending Monday's trading at three-month closing highs.
The major averages have pulled back off their highs for the young session in the past few minutes but are holding on to notable gains. The Dow is up 57.75 points or 0.4 percent at 13,175.26, the Nasdaq is up 14.02 points or 0.5 percent at 3,003.93 and the S&P 500 is up 7.34 points or 0.5 percent at 1,401.57.
The early strength on Wall Street is partly due to optimism about the likelihood of further stimulus from the European Central Bank following the release of disappointing economic data from the region.
Data from Europe showed that the Italian economy shrank in the second quarter, marking the fourth consecutive quarter of contraction. A separate report showed a steeper than expected drop in German factory orders in June.
Amid another light day on the U.S. economic calendar, traders are also likely to keep an eye on comments by Federal Reserve Chairman Ben Bernanke.
Bernanke is scheduled to host a town hall event with educators from across the country and will take questions after delivering prepared remarks.
Investors are likely to pay close attention to the question-and-answer portion, hoping that the Fed chief will address the state of the economy and the outlook for monetary policy.
The Federal Reserve is also due to release its report on consumer credit in the month of June at 3 pm ET. Economists expect credit to increase by about $10.3 billion.
Natural gas stocks have moved sharply higher in early trading, driving the NYSE Arca Natural Gas Index up by 2.2 percent. Chesapeake Energy (CHK) has helped to lead the sector higher, surging up by 7.6 percent after reporting strong second quarter profit growth.
Significant strength has also emerged among networking stocks, which are extending a recent upward move. The NYSE Arca Networking Index has advanced by 1.7 percent, rising to its best intraday level in a month.
Electronic storage, oil service, and banking stocks have also shown strong upward moves, reflecting broad based buying interest on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, adding to yesterday's gains. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index ended the day up by 0.4 percent.
The major European markets are also moving to the upside on the day. While the U.K.'s FTSE 100 Index is only just above the unchanged line, the German DAX Index is up by 0.5 percent and the French CAC 40 Index is up by 1.1 percent.
In the bond market, treasuries have moved notably lower amid the optimism about Europe. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.7 basis points at 1.615 percent.
by RTT Staff Writer
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