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U.S. Stocks Show Strong Move Back To The Upside

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With the markets continuing to show intense sensitivity to trade-related news, stocks showed a strong move back to the upside during the trading day on Tuesday after moving mostly lower over the course of the previous session.

The major averages ended the day firmly in positive territory. The Dow climbed 197.43 points or 0.8 percent to 25,877.33, the Nasdaq jumped 83.35 points or 1.1 percent to 7,785.72 and the S&P 500 advanced 24.13 points or 0.9 percent to 2,864.36.

The rebound on Wall Street came in reaction to news that the U.S. Commerce Department has temporarily eased trade restrictions on Chinese tech giant Huawei.

The Commerce Department issued a temporary license authorizing specific, limited engagement in transactions involving the export, re-export, and transfer of items to Huawei for 90 days.

Commerce Secretary Wilbur Ross said the temporary reprieve grants "operators time to make other arrangements and the Department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services."

"In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks," he added.

The move by the Trump administration led U.S. tech giant Google to reverse an earlier decision and announce it will continue to work with Huawei over the next 90 days.

Tech stocks rebounded on the news after falling sharply in the previous session amid reports of companies cutting off supplies to Huawei.

Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing an unexpected drop in existing home sales in the month of April.

NAR said existing home sales dipped by 0.4 percent to an annual rate of 5.19 million in April after plunging by 4.9 percent to a rate of 5.21 million in March.

The continued decrease came as a surprise to economists, who had expected existing home sales to jump by 2.7 percent to a rate of 5.35 million.

Sector News

Semiconductor stocks turned in some of the market's best performances on the day after falling sharply in the previous session.

Reflecting the rebound by the sector, the Philadelphia Semiconductor Index spiked by 2.1 percent after plunging by 4 percent on Monday.

Substantial strength also emerged among biotechnology stocks, as reflected by the 2.2 percent jump by the NYSE Arca Biotechnology Index.

Natural gas, steel, computer hardware and oil service stocks also saw considerable 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 turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index edged down by 0.1 percent, while China's Shanghai Composite Index surged up by 1.2 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index advanced by 0.9 percent, the French CAC 40 Index climbed by 0.5 percent and the U.K.'s FTSE 100 Index rose by 0.3 percent.

In the bond market, treasuries extended the moderate drop seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 2.426 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to the minutes of the latest Federal Reserve meeting, which are due to be released late in the trading day.

Earnings news from Lowe's (LOW) and Target (TGT) may also attract attention, with the retailers among the companies due to report their quarterly results before the start of trading on Wednesday.

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