Nasdaq Sharply Higher In Afternoon Trading, Dow Posting Modest Gain

wallstreet sept05 11jan22 lt

Following the recovery from the early sell-off seen in the previous session, stocks have once again fluctuated over the course of the trading day on Tuesday. The major averages moved to the downside in early trading but have subsequently rebounded.

Currently, the major averages are all in positive territory, with the tech-heavy Nasdaq posting a standout gain. While the Nasdaq is up 147.75 points or 1 percent at 15,090.58, the S&P 500 is up 19.76 points or 0.4 percent at 4,690.05 and the Dow is up 50.92 points or 0.1 percent at 36,119.79.

The volatility on Wall Street comes as traders keep an eye on a Senate Banking Committee hearing on Federal Reserve Chair Jerome Powell's nomination for another term.

In prepared remarks, Powell highlighted elevated inflation as a result of supply chain issues and said the Fed would use all of its tools to prevent higher inflation from becoming entrenched.

"We can begin to see that the post-pandemic economy is likely to be different in some respects," Powell said. "The pursuit of our goals will need to take these differences into account."

He added, "To that end, monetary policy must take a broad and forward-looking view, keeping pace with an ever-evolving economy."

Powell later told the committee the Fed would be willing to raise interest rates more than currently expected to combat inflation.

While Powell's remarks have been described as "hawkish," they are not seen as indicating the Fed will be more aggressive than already suggested by the minutes of the central bank's latest meeting.

Trading is also being impacted by developments in the bond markets, with the ten-year yield continuing to give back ground after reaching its highest intraday level since January 2020 on Monday.

Sector News

Energy stocks have moved sharply higher on the day, benefiting from a spike by the price of crude oil. Crude for February delivery is currently soaring $3.06 to $81.29 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 4.2 percent and the NYSE Arca Oil Index is up by 2.7 percent.

Significant strength has also emerged among airline stocks, as reflected by the 2.5 percent jump by the NYSE Arca Airline Index.

Housing, semiconductor and brokerage stocks are also seeing notable strength on the day, while interest rate-sensitive utilities stocks have moved to the downside.

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 0.9 percent, while China's Shanghai Composite Index declined by 0.7 percent.

Meanwhile, the major European markets showed a notable rebound following recent weakness. While the U.K.'s FTSE 100 Index rose by 0.6 percent, the French CAC 40 Index and the German DAX Index jumped by 1 percent and 1.1 percent, respectively.

In the bond market, treasuries are seeing modest strength after showing a lack of direction earlier in the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 1.766 percent.

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