Bargain Hunting Contributes To Modest Recovery On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Tuesday, although buying interest was somewhat subdued. The strength on the day helped the markets to partly recover from the notable weakness seen over the past few sessions.

While the major averages all closed in positive territory, the Nasdaq outperformed its counterparts. The Nasdaq advanced 33.23 points or 0.8 percent to 4,112.99, while the Dow edged up 10.27 points or 0.1 percent to 16,256.14 and the S&P 500 rose 6.92 points or 0.4 percent to 1,851.96.

Bargain hunting likely contributed to the strength on Wall Street, with traders picking up stocks at reduced levels following the recent pullback.

The standout gain by the tech-heavy Nasdaq came after it showed its steepest three-session decline since November of 2011 and ended Monday's trading at its worst closing level in two months.

However, traders seemed somewhat reluctant to make any significant moves as they wait for the latest earnings season to get underway.

After the close of today's trading, aluminum giant Alcoa (AA) is releasing its first quarter results, marking the unofficial start of the earnings season.

Late in the trading day, some positive sentiment may have been generated by comments from Minneapolis Federal Reserve President Narayana Kocherlakota, who argued that the Fed should do even more to kick start the U.S. economy after a rough winter.

In remarks to the Chamber of Commerce in Rochester, Minnesota, Kocherlakota said the central bank is not doing all it can to promote faster job creation and healthy levels of inflation.

Kocherlakota was the only dissenting vote at the March Fed meeting where policy makers trimmed their asset purchase to $55 billion per month.

Among individual stocks, shares of Alkermes (ALKS) moved notably higher after the biopharmaceutical company announced positive results from a pivotal phase 3 study of its experimental drug to treat schizophrenia.

Athletic apparel giant Nike (NKE) also turned in a strong performance after Stifel upgraded its rating on the company's stock to Buy from Hold.

On the other hand, shares of Dr. Pepper Snapple Group (DPS) came under pressure after Wells Fargo downgraded the beverage maker's shares to Underperform from Market Perform.

Sector News

Gold stocks showed a strong move to the upside over the course of the trading day, driving the NYSE Arca Gold Bugs Index up by 2.4 percent. Despite the gain, the index remains well off its recent highs.

The strength among gold stocks came amid an increase by the price of the precious metal, with gold for June delivery climbing $10.80 to $1,309.10 an ounce.

Considerable strength also emerged among utilities stocks, as reflected by the 1.7 percent gain posted by the Dow Jones Utilities Average. With the gain, the average set a six-year closing high.

Electronic storage, natural gas, oil service, and semiconductor stocks also saw significant strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index slumped by 1.4 percent, while Hong Kong's Hang Seng Index advanced by 1 percent.

Meanwhile, the major European markets ended the day modestly lower but well off their worst levels. While the U.K.'s FTSE 100 Index dropped by 0.5 percent, the French CAC 40 Index and the German DAX Index fell by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries moved modestly higher over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 2.681 percent

Looking Ahead

Trading on Wednesday may be impacted by reaction to Alcoa's quarterly results, which could set the tone for the impending earnings season.

Traders are also likely to keep an eye on the minutes of the latest Federal Reserve meeting, as they may shed some light on the outlook for monetary policy.