Stocks have moved notably higher in early trading on Tuesday, extending the upward move seen over the course of the previous session. The major averages have climbed firmly into positive territory, further offsetting last week's steep losses.
The major averages have seen some further upside in the past few minutes, reaching new highs for the young session. The Dow is up 118.03 points or 0.8 percent at 14,685.20, the Nasdaq is up 30.22 points or 0.9 percent at 3,263.77 and the S&P 500 is up 12.07 points or 0.8 percent at 1,574.57.
The early strength on Wall Street is partly due to a positive reaction to the latest batch of earnings news, including quarterly results from Dow components DuPont (DD) and Travelers (TRV).
DuPont reported first quarter adjusted earnings of $1.56 per share, exceeding analyst estimates for $1.52 per share. The chemical giant also reported sales for the quarter that came in line with expectations and reaffirmed its full-year guidance.
Insurance giant Travelers also reported first quarter earnings that came in above expectations and raised its quarterly dividend to $0.50 per share.
Additionally, shares of Netflix (NFLX) are moving sharply higher after the company reported much better than expected first quarter earnings on a notable increase in subscribers.
The markets have also benefited from optimism about an interest rate cut by the European Central Bank following the release of a disappointing reading on private sector activity in the euro-zone.
Markit's flash estimate showed that the composite output index measuring the performance of the manufacturing and service sectors was unchanged at 46.5 in April. A reading below 50 indicates a contraction in activity.
Ben May, European Economist at Capital Economics, said the data provides "further signs that the improvement in market sentiment alone will not be enough to drag the euro-zone out of recession."
Optimism about an interest rate cut in Europe helped to offset the negative sentiment generated by disappointing Chinese manufacturing data.
Housing stocks have shown a substantial move to the upside in early trading, resulting in a 3 percent gain by the Philadelphia Housing Sector Index. The early strength in the sector comes ahead of the release of the Commerce Department's report on new home sales.
Computer hardware, biotechnology, networking, and airline stocks are also posting strong gains, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index ended the day down by 0.3 percent, while China's Shanghai Composite Index tumbled by 2.6 percent.
Meanwhile, the major European markets have moved sharply higher on the day. While the French CAC 40 Index has surged up by 2.9 percent, the German DAX Index and the U.K.'s FTSE 100 Index are up by 2 percent and 1.7 percent, respectively.
In the bond market, treasuries are moving modestly higher despite the early rally on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.7 basis points at 1.681 percent.
by RTT Staff Writer
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