Stocks moved mostly higher over the course of the trading day on Tuesday, offsetting the weakness that was seen in the previous session. The Dow reached a new record closing high, while the S&P 500 closed just shy of setting a new all-time high.
The major averages saw continued strength late in the session, closing near their best levels of the day. The Dow jumped 111.90 points or 0.8 percent to 14,559.65, the Nasdaq climbed 17.18 points or 0.5 percent to 3,252.48 and the S&P 500 advanced 12.08 points or 0.8 percent to 1,563.77.
The markets benefited from a positive reaction to a mixed batch of U.S. economic data, with upbeat reports on durable goods orders and home prices overshadowing disappointing reports on new home sales and consumer confidence.
Early buying interest was generated by the release of a report from the Commerce Department showing a bigger than expected increase in durable goods orders.
The report said durable goods orders surged up by 5.7 percent in February following a revised 3.8 percent decrease in January. Economists had expected durable goods orders to rise by 3.5 percent.
While the rebound was largely due to a jump in orders in the volatile transportation sector, economists noted that combining the data for the past two months points to strength in the first quarter.
A separate report from Standard & Poor's showed that home prices in major U.S. metropolitan areas increased at an annual rate of 8.1 percent in January, reflecting the strongest growth since June of 2006.
The data helped to drive stocks higher in early trading, and the markets maintained a positive bias despite the release of the less encouraging reports on new home sales and consumer confidence.
The Commerce Department said new home sales fell 4.6 percent to a seasonally adjusted annual rate of 411,000 in February from the revised January rate of 431,000. Economists had expected new home sales to drop to 425,000.
The bigger than expected drop by new home sales came after the annual rate of sales reached its highest level since September of 2008 in January.
Meanwhile, the Conference Board said its consumer confidence index fell to 59.7 in March from a revised 68.0 in February, while economists had expected the index to dip to 67.5.
The sharp drop by the consumer confidence index was partly due to concerns about the impact of the across-the-board government spending cuts known as the sequester.
Railroad stocks showed a strong move to the upside over the course of the trading day, driving the Dow Jones Railroads Index up by 1.6 percent. With the gain, the index climbed back toward the record closing high that it set earlier this month.
Kansas City Southern (KSU), Canadian Pacific (CP), and Norfolk Southern (NSC) turned in some of the railroad sector's best performances.
Considerable strength also emerged among oil service stocks, as reflected by the 1.4 percent gain posted by the Philadelphia Oil Service Index. The strength in the sector came as crude for May delivery climbed $1.53 to $96.34 a barrel.
Healthcare provider stocks also turned in a strong performance, resulting in a 1.4 percent gain by the Morgan Stanley Healthcare Provider Index The gain lifted the index to a new record closing high.
Telecom, pharmaceutical, and natural gas stocks also saw some strength on the day, moving to the upside along with most of the major sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. While Japan's Nikkei 225 Index fell by 0.6 percent, Hong Kong's Hang Seng Index ended the day up by 0.3 percent.
Meanwhile, the major European markets all moved to the upside on the day. The French CAC 40 Index advanced by 0.6 percent, while the U.K.'s FTSE 100 Index and the German DAX Index crept up by 0.3 percent and 0.1 percent, respectively.
In the bond market, treasuries moved modestly higher over the course of the session, recovering from early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.906 percent after reaching a high of 1.944 percent.
Following today's slew of data, the economic calendar for Wednesday is relatively light. Nonetheless, traders are likely to keep an eye on a report on pending home sales. Speeches from a number of Federal Reserve officials may also attract some attention.
by RTT Staff Writer
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