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U.S. Stocks Rebounding On Renewed Stimulus Optimism

wallstreet july26 20oct20 lt

After ending the previous session sharply lower, stocks have shown a strong move back to the upside in morning trading on Tuesday. The major averages have all climbed firmly into positive territory.

Currently, the major averages are just off their highs of the session. The Dow is up 228.85 points or 0.8 percent at 28,424.27, the Nasdaq is up 104.37 points or 0.9 percent at 11,583.25 and the S&P 500 is up 30.47 points or 0.9 percent at 3,457.39.

The rebound on Wall Street comes amid renewed optimism about lawmakers in Washington reaching an agreement on a new stimulus bill.

In a post on Twitter, House Speaker Nancy Pelsoi's deputy chief of staff Drew Hammill said the Democratic leader continued to "narrow their differences" in a phone call with Treasury Secretary Steven Mnuchin.

"The Speaker continues to hope that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election," Hammill tweeted.

He added, "The two principals will speak again tomorrow and staff work will continue around the clock."

Computer hardware stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Computer Hardware Index up by 2.6 percent.

Significant strength is also visible among banking stocks, as reflected by the 2.3 percent jump by the KBW Bank Index.

Oil service, airline and brokerage stocks are also seeing considerable strength, moving higher along wit most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index rose by 0.5 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.4 percent, the French CAC 40 Index is up by 0.3 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent.

In the bond market, treasuries are extending the downward trend seen over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.3 basis points at 0.794 percent.

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