While buying interest was somewhat subdued, stocks moved mostly higher during trading on Tuesday after ending the previous session firmly in the red. The markets benefited from optimism about the possibility of further monetary stimulus from the Federal Reserve.
The major averages all ended the day in positive territory, although the Nasdaq inched up only 0.51 points or less than a tenth of a percent to 3,104.53. The Dow rose 69.07 points or 0.5 percent to 13,323.36 and the S&P 500 climbed 4.48 points or 0.3 percent to 1,433.56.
With the moderate gain on the day, the Dow once again ended the session at its best closing level in well over four years.
The strength on Wall Street came as traders looked ahead to the Federal Reserve's upcoming monetary policy meeting, with many expecting the central bank to announce another round of quantitative easing.
However, uncertainty about the actual announcement from the Fed helped to keep traders on the sidelines, limiting the upside for the markets.
Trading activity also remained subdued ahead of the German Federal Constitutional Court's ruling on a request for a temporary injunction against Europe's permanent bailout fund, with the decision due on Wednesday.
Meanwhile, the markets largely shrugged off a report from the Commerce Department showing a narrower than expected U.S. trade deficit for the month of July.
The report showed that the trade deficit widened to $42.0 billion in July from a revised $41.9 billion in June. Economists had expected the deficit to widen to $44.3 billion from the $42.9 billion deficit originally reported for the previous month.
Among individual stocks, convenience store operator Casey's General Stores (CASY) moved notably higher after reporting better than expected first quarter earnings, although its revenues came in below analyst estimates. Shares of Casey's surged up by 4.2 percent.
Green Mountain Coffee (GMCR) also posted a notable gain amid news that Italian coffee giant Luigi Lavazza increased its stake in the coffee company to 6.8 percent.
On the other hand, shares of Shuffle Master (SHFL) came under pressure after the casino games maker reported third quarter earnings and revenues that rose year-over-year but still came in weaker than expected. Shuffle Master ended the day down by 4.7 percent.
While many of the major sectors ended the day show relatively modest moves, considerable strength was visible among steel stocks. The NYSE Arca Steel Index surged up by 2.1 percent to its best closing level in a month.
Cliffs Natural Resources (CLF), Allegheny Technologies (ATI) and U.S. Steel (X) turned in some of the steel sector's best performances.
Natural gas stocks also moved sharply higher on the day, driving the NYSE Arca Natural Gas Index up by 1.9 percent. The strength in the sector came as natural gas for October delivery rose $0.18 to $2.992 per million BTUs.
Oil service, computer hardware, and railroad stocks also saw considerable strength on the day, with oil service stocks moving higher along with the price of crude oil.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.7 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.
The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the French CAC 40 Index advanced by 0.9 percent and the German DAX Index jumped by 1.3 percent.
In the bond market, treasuries showed a lack of direction on the day before eventually closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.2 basis points to 1.695 percent.
Trading on Wednesday could be impacted by the ruling by the German constitutional court, although activity may remain subdued ahead of Thursday's announcement from the Fed.
While U.S. reports on import and export prices and wholesale inventories are also scheduled to be released on Wednesday, the data is not likely to attract much attention.
by RTT Staff Writer
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