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Economic Optimism Leads To Continued Strength On Wall Street

wallstreet aug28 02jun20 lt

Stocks moved mostly higher over the course of the trading session on Tuesday, extending the upward move seen in the previous session. The advance lifted the Nasdaq to its best closing level since February, while the Dow and the S&P 500 reached three-month closing highs.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow jumped 267.63 points or 0.6 percent to 25,742.65, the Nasdaq climbed 56.33 points or 0.6 percent to 9,611.22 and the S&P 500 advanced 25.09 points or 0.8 percent to 3,080.82.

The strength on Wall Street extended a recent upward trend amid optimism about an economy recovery as businesses reopen following the coronavirus-induced shutdown.

Economists have repeatedly warned that the recovery will take time, but traders have seemingly shrugged off those concerns as stocks continue to recover from their March lows.

Traders have also largely ignored the mass protests across the country in response to the death of George Floyd at the hands of Minneapolis police officers.

The protests have turned violent in many instances, but traders appear to believe that the unrest will be curtailed before having any meaningful impact on the economy.

Energy stocks helped lead the markets higher, benefiting from a sharp increase by the price of crude oil. Crude for July delivery surged up $1.37 to $36.81 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 4.1 percent, the NYSE Arca Oil Index spiked by 3.3 percent and the NYSE Arca Natural Gas Index shot up by 3.1 percent.

Substantial strength was also visible among steel stocks, as reflected by the 3.2 percent jump by the NYSE Arca Steel Index. The index ended the session at its best closing level in nearly three months.

Chemical, semiconductor and transportation stocks also saw considerable strength on the day, while gold stocks bucked the uptrend amid a steep drop by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 1.2 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

The major European markets also moved to the upside on the day. While the German DAX Index spiked by 3.8 percent, the French CAC 40 Index jumped by 2 percent and the U.K.'s FTSE 100 Index advanced by 0.9 percent.

In the bond market, treasuries moved modestly lower over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.8 basis points to 0.680 percent.

Looking Ahead

Following today's lack of major U.S. economic data, trading on Wednesday may be impacted by reaction to reports on private sector employment, service sector activity and factory orders.

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