logo
  

U.S. Stocks Close Sharply Higher Amid Bargain Hunting

wallstreet aug29 21jun22 lt

With traders returning to their desks following the long holiday weekend, stocks moved sharply higher during trading on Tuesday. The major averages all showed strong moves to the upside after ending last Friday's volatile session mixed.

The major averages pulled back off their best levels going into the close but still posted substantial gains. The Dow jumped 641.47 points or 2.2 percent to 30,530.25, the Nasdaq surged 270.95 points or 2.5 percent to 11,069.30 and the S&P 500 spiked 89.95 points or 2.5 percent to 3,764.79.

The rally on Wall Street came as traders picked up stocks at relatively reduced levels following recent weakness in the markets.

While the Nasdaq and S&P 500 regained some ground last Friday, the Dow ended the session at its lowest closing level in well over a year.

Bargain hunting also contributed to strength in the overseas markets that carried over onto Wall Street early in the session.

Among individual stocks, shares of Valneva (VALN) skyrocketed after drug giant Pfizer (PFE) agreed to acquire an 8.1 percent stake in the French vaccine maker for $95 million.

Shares of Spirit Airlines (SAVE) also soared after JetBlue (JBLU) increased its takeover offer for the discount airline to $33.50 per share.

Electric car maker Tesla (TSLA) also showed a strong move to the upside after CEO Elon Musk told Bloomberg the company's salaried workforce would be cut by about 10 percent over the next three months.

Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing another steep drop in U.S. existing home sales in the month of May.

NAR said existing home sales plunged by 3.4 percent to an annual rate of 5.41 million in May after slumping by 2.6 percent to a revised rate of 5.60 million in April.

Economists had expected existing home sales to tumble by 3.7 percent to a rate of 5.40 million from the 5.61 million originally reported for the previous month.

Sector News

Energy stocks turned in some of the best performances on the day, benefiting from a rebound by the price of crude oil. Crude for August delivery jumped $1.53 or 1.4 percent to $109.52 a barrel after plummeting $7.26 or 6.3 percent to $107.99 a barrel last Friday.

Reflecting the strength in the energy sector, the NYSE Arca Oil Index soared by 5 percent, the Philadelphia Oil Service Index surged by 4.8 percent, and the NYSE Arca Natural Gas Index shot up by 3.5 percent.

Telecom stocks also saw substantial strength, resulting in a 3.2 percent jump by the NYSE Arca North American Telecom Index.

Significant strength was also visible among semiconductor stocks, as reflected by the 2.8 percent surge by the Philadelphia Semiconductor Index. The index continued to regain ground after hitting its lowest intraday level in over a year last Friday.

Healthcare, pharmaceutical, financial and chemical stocks also showed notable moves to the upside amid broad based buying interest.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index surged by 1.8 percent and 1.9 percent, respectively, although China's Shanghai Composite Index bucked the uptrend and dipped by 0.3 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index advanced by 0.8 percent, the U.K.'s FTSE 100 Index rose by 0.4 percent and the German DAX Index edged up by 0.2 percent.

In the bond market, treasuries gave back ground after moving notably higher over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.8 basis points to 3.307 percent.

Looking Ahead

Congressional testimony by Federal Reserve Chair Jerome Powell is likely to be in focus on Wednesday along with remarks by several other Fed officials.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT