U.S. Stocks Regaining Ground Following Yesterday’s Sell-Off
Stocks have shown a strong move to the upside in morning trading on Tuesday, regaining ground following the sell-off seen in the previous session. The major averages have climbed firmly into positive territory but only partly offset yesterday’s losses.
Currently, the major averages are just off their best levels of the day. The Dow is up 472.28 points or 1.4 percent at 34,434.32, the Nasdaq is up 97.45 points or 0.7 percent at 14,372.44 and the S&P 500 is up 45.47 points or 1.1 percent at 4,303.96.
The rebound on Wall Street comes as traders look to pick up stocks at relatively reduced levels after the sharp drop seen on Monday dragged the major averages down to their lowest levels in almost a month.
A positive reaction to the latest earnings news is also contributing to strength on Wall Street, with tech giant IBM Corp. (IBM) moving notably higher after reporting better than expected second quarter results.
HCA Healthcare (HCA) has also spiked after the hospital company reported second quarter results that exceeded analyst estimates on both the top and bottom lines.
Halliburton (HAL) and J.B. Hunt Transport Services (JBHT) are also posting strong gains after reporting better than expected second quarter earnings.
The major averages remain well off their recent highs, however, as concerns about a surge in new coronavirus cases continue to weigh on the markets.
On the economic front, the Commerce Department released a report showing a substantial increase in new residential construction in the month of June.
The Commerce Department said housing starts spiked by 6.3 percent to an annual rate of 1.643 million in June after jumping by 2.1 percent to a revised rate of 1.546 million in May.
Economists had expected housing starts to increase by 1.1 percent to a rate of 1.590 million from the 1.572 million originally reported for the previous month.
Meanwhile, the report showed building permits tumbled by 5.1 percent to an annual rate of 1.598 million in June after slumping by 2.9 percent to a revised rate of 1.683 million in May.
Building permits, an indicator of future housing demand, had been expected to climb by 1.1 percent to a rate of 1.700 million from the 1.681 million originally reported for the previous month.
Bargain hunting also contributed to considerable strength among banking stocks, driving the KBW Bank Index up by 2.9 percent. The index is bouncing off a nearly four-month closing low.
Airline stocks have also shown a substantial rebound, with the NYSE Arca Airline Index soaring by 2.7 percent after ending the previous session at its lowest closing level in over five months.
Oil service stocks are also seeing significant strength, resulting in a 2.7 percent spike by the Philadelphia Oil Service Index.
The rebound by oil service stocks comes as the price of crude oil for August delivery is climbing $0.58 to $67 a barrel after plunging $5.39 to $66.42 a barrel on Monday.
Brokerage, natural gas and housing stocks have also shown strong moves to the upside, rebounding along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slid by 1 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets have rebounded after ending the previous session sharply lower. While the French CAC 40 Index has jumped by 1.2 percent, the German DAX Index is up by 0.8 percent and the U.K.’s FTSE Index is up by 0.7 percent.
In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.185 percent.
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