After moving moderately higher in early trading on Tuesday, stocks have seen some further upside over the course of the trading session. With the gains on the day, the tech-heavy Nasdaq has reached a new thirteen-year high.
The major averages are currently posting strong gains, near their highs for the session. The Dow is up 70.74 points or 0.5 percent at 15,200.41, the Nasdaq is up 39.57 points or 1.1 percent at 3,811.05 and the S&P 500 is up 13.78 points or 0.8 percent at 1,695.33.
The strength on Wall Street comes despite news that lawmakers failed to reach an agreement on a temporary spending bill, resulting in a government shutdown.
The GOP-controlled House passed a bill that would have kept the government running but delayed the implementation of Obamacare.
However, the Democratic-controlled Senate rejected the legislation, resulting in the first government shutdown in seventeen years.
While essential government employees such as air traffic controllers, prison guards, and border patrol agents will remain on the job, about 800,000 federal employees will be furloughed as a result of the government shutdown.
Peter Boockvar, chief market analyst at the Lindsey Group, said the upward momentum for the markets despite the government shutdown reflects optimism that the shutdown will be temporary and that the Federal Reserve won't be tapering any time soon due to the risk to GDP.
Positive sentiment was also generated by a report from the Institute for Supply Management showing an unexpected increase by its index of U.S. manufacturing activity.
The ISM said its purchasing managers index edged up to 56.2 in September from 55.7 in August, with a reading above 50 indicating growth in the manufacturing sector. Economists had been expecting the index to dip to 55.0.
With the unexpected increase, the index of activity in the manufacturing sector rose to its highest level since April of 2011.
Commercial real estate stocks are seeing considerable strength in mid-day trading, with the Morgan Stanley REIT Index up by 2.2 percent. The index is bouncing off the two-week closing low set in the previous session.
Ashford Hospitality Trust (AHT), Sun Communities (SUI), and DDR Corp. (DDR) are turning in some of the real estate sector's best performances.
Significant strength is also visible among airline stocks, as reflected by the 2.1 percent gain being posted by the NYSE Arca Airline Index. Republic Airways (RJET) is leading the sector higher after agreeing to sell Frontier Airlines to an affiliate of Indigo Partners in a deal valued at about $145 million.
Health insurance and healthcare provider stocks are also turning in strong performances on the day, with the Morgan Stanley Healthcare Payor Index and the Morgan Stanley Healthcare Provider Index up by 2 percent and 1.7 percent, respectively.
Networking, railroad, and biotechnology stocks are also moving notably higher, while gold stocks are bucking the uptrend amid a sharp drop by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, although the markets in Hong Kong and mainland China were closed for public holidays. Japan's Nikkei 225 Index edged up by 0.2 percent.
Meanwhile, the U.K.'s FTSE 100 Index ended the day roughly flat, while the French CAC 40 Index and the German DAX Index surged up by 1.3 percent and 1.1 percent, respectively.
In the bond market, treasuries are seeing modest weakness after trending higher in recent weeks. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 2.634 percent.
by RTT Staff Writer
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