logo
Plus   Neg
Share
Email

Bargain Hunting Contributes To Rebound On Wall Street

wallst-032918_14may19-lt.jpg

Following the sell-off seen in the previous session, stocks showed a notable move back to the upside during the trading day on Tuesday. With the rebound, the Dow bounced off its lowest closing level in three months.

The major averages gave back ground going into the close but remained firmly positive. The Dow advanced 207.06 points or 0.8 percent to 25,532.05, the Nasdaq jumped 87.47 points or 1.1 percent to 7,734.49 and the S&P 500 climbed 22.54 points or 0.8 percent to 2,834.41.

Bargain hunting contributed to the rebound on Wall Street, with traders picking up stocks at reduced levels following the steep loss seen in Monday.

The markets also benefited from continued optimism the U.S. and China will eventually reach a trade deal despite the retaliatory tariffs announced by China.

President Donald Trump has continued to express confidence the Chinese will yield to U.S. demands, claiming a trade agreement was 95 percent complete before China reneged.

Trump has repeatedly argued that the U.S. is in a stronger position than China in the negotiations, citing the recent strength of the U.S. economy.

"If you looked at the first quarter — which is always, historically, the worst quarter — we were at 3.2 percent. People were very surprised," Trump told reporters on Monday.

"Well, a lot of that was the tariffs that we were taking in from China," he added. "So we're in a very good position and I think it's only going to get better."

Trump also indicated that he would be meeting with Chinese President Xi Jinping at the G20 Summit in Japan late next month.

"We have a very good relationship. Maybe something will happen," Trump said. "But we're going to be meeting, as you know, at the G20 in Japan. And that will be, I think, probably, a very fruitful meeting."

Sector News

Oil service stocks moved sharply higher over the course of the trading session, driving the Philadelphia Oil Service Index up by 3.1 percent. The index ended the previous session at its lowest closing level in over four months.

The rebound by oil service stocks came as the price of crude oil for June delivery climbed $0.74 to $61.78 a barrel on news of a drone attack on two oil pumping stations in Saudi Arabia.

Bargain hunting also contributed to considerable strength among semiconductor stocks, with the Philadelphia Semiconductor Index surging up by 2.4 percent after plunging by 4.7 percent on Monday.

Substantial strength was also visible among natural gas stocks, as reflected by the 2.2 percent jump by the NYSE Arca Natural Gas Index. An increase by the price of natural gas is contributing to the strength in the sector.

Semiconductor stocks are also seeing considerable strength after turning in some of the market's worst performances on Monday, with the Philadelphia Semiconductor Index surging up by 2.2 percent.

Tobacco, steel, biotechnology and software stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slid by 0.6 percent, while Hong Kong's Hang Seng Index tumbled by 1.5 percent.

Meanwhile, the major European markets rebounded following recent weakness. While the French CAC 40 Index surged up by 1.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index jumped by 1.1 percent and 1 percent, respectively.

In the bond market, treasuries moved modestly lower after initially showing a lack of direction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to 2.419 percent.

Looking Ahead

Economic news may move back into the spotlight on Wednesday, with traders likely to keep a close eye on reports on retail sales, industrial production, and homebuilder confidence.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT