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Nasdaq, S&P 500 Reach Record Closing Highs On Upbeat Earnings - U.S. Commentary

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Following the lackluster performance in the previous session, stocks moved mostly higher over the course of the trading day on Tuesday. With the upward move on the day, the Nasdaq and the S&P 500 ended the session at record closing highs.

The major averages all ended the day firmly in positive territory. The Dow climbed 145.34 points or 0.6 percent to 26,656.39, the Nasdaq surged up 105.56 points or 1.3 percent to 8,120.82 and the S&P 500 jumped 25.71 points or 0.9 percent to 2,933.68.

The strength on Wall Street reflected a positive reaction to upbeat earnings news from a number of big-name companies, including Dow components United Technologies (UTX) and Coca-Cola (KO).

United Technologies and Coca-Cola both moved notably higher on the day after reporting better than expected first quarter results.

Shares of Twitter (TWTR) also saw significant strength after the social media giant reported better than expected first quarter earnings, revenue, and user growth.

Toy maker Hasbro (HAS) also moved sharply higher after unexpectedly turning a profit in the first quarter on better than expected revenues.

Meanwhile, Procter & Gamble (PG) and Verizon (VZ) both moved to the downside despite reporting first quarter earnings that exceeded analyst estimates.

Positive sentiment was also generated by a Commerce Department report showing new home sales in the U.S. unexpectedly jumped to their highest level in well over a year in the month of March.

The Commerce Department said new home sales surged up by 4.5 percent to an annual rate of 692,000 in March after soaring by 5.9 percent to a revised rate of 662,000 in February.

The continued increase surprised economists, who had expected new home sales to drop by 2.5 percent to a rate of 650,000 from the 667,000 originally reported for the previous month.

With the unexpected spike, new home sales reached their highest annual rate since hitting 712,000 in November of 2017.

Sector News

Biotechnology stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Biotechnology Index up by 2.7 percent.

Bargain hunting contributed the strength in the biotech sector after the index ended Monday's trading at its lowest closing level in well over three months.

Significant strength also emerged among healthcare stocks, as reflected by the 1.7 percent jump by the Dow Jones U.S. Health Care Index.

Software, retail and pharmaceutical stocks also saw notable strength on the day, reflecting broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher, although China's Shanghai Composite Index bucked the uptrend and fell by 0.5 percent. Japan's Nikkei 225 Index edged up by 0.2 percent and Australia's S&P/ASX 200 Index jumped by 1 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.9 percent, the French CAC 40 Index and the German DAX Index edged up by 0.2 percent and 0.1 percent, respectively.

In the bond market, treasuries rebounded following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2 basis points at 2.570 percent.

Looking Ahead

Earnings news is likely to remain in the spotlight on Wednesday amid a relatively quiet day on the U.S. economic front.

eBay (EBAY), Snap (SNAP), TD Ameritrade (AMTD), and Texas Instruments (TXN) are among the companies scheduled to release their quarterly results after the close of today's trading.

AT&T (T), Boeing (BA), and Caterpillar (CAT) are also among the companies due to report their results before the start of trading on Wednesday.

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