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Tentative Border Security Deal Leads To Jump On Wall Street - U.S. Commentary

wallstreet aug27 12feb19 lt

Stocks have moved sharply higher in morning trading on Tuesday following the lackluster performance seen in the previous session. The major averages have all shown strong moves to the upside after ending Monday's trading mixed.

Currently, the major averages are hovering firmly in positive territory. The Dow is up 223.84 points or 0.9 percent at 25,276.95, the Nasdaq is up 80.16 points or 1.1 percent at 7,388.06 and the S&P 500 is up 23.33 points or 0.9 percent at 2,733.13.

The strength on Wall Street comes amid optimism lawmakers will manage to avoid another government shutdown after negotiators reached a tentative agreement on border security.

Senate Appropriations Committee Chairman Richard Shelby, R-Ala., a lead Republican negotiator, said the two sides have reached an "agreement in principle."

The agreement reportedly includes $1.4 billion for physical barriers on the border, well short of the $5.7 billion President Donald Trump has demanded for construction or a border wall.

Democrats have also purportedly agreed to drop their demand to reduce the number of illegal immigrants who can be detained by Immigration and Customs Enforcement.

Shelby said the White House has been consulted throughout the negotiations, although it remains to be seen if Trump will sign off on the deal.

Trump continued to tout the success of walls during a rally in the border town of El Paso, Texas, on Monday, claiming sections of the wall are already being built or refurbished despite the dispute with Democrats.

The news comes as lawmakers face a deadline of midnight on Friday to pass a spending bill and avoid another government shutdown.

Tobacco stocks have shown a substantial move to the upside in morning trading, driving the NYSE Arca Tobacco Index up by 3.1 percent. The index has reached its best intraday level in nearly three months.

Significant strength has also emerged among housing stocks, as reflected by the 2.1 percent jump by the Philadelphia Housing Sector Index. With the spike, the index has reached a four-month intraday high.

Energy stocks are also seeing considerable strength amid a sharp increase by the price of crude oil, moving notably higher along with semiconductor, retail, computer hardware and financial stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index soared by 2.6 percent, while China's Shanghai Composite Index climbed by 0.7 percent.

European stocks have also moved mostly higher on the day. While the U.K.'s FTSE 100 Index has inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index are both jumping by 1.1 percent.

In the bond market, treasuries are extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.1 basis points at 2.682 percent.

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