Optimism About Greece Leads To Strength On Wall Street - U.S. Commentary

(RTTNews) - After experiencing some volatility in early trading, stocks moved sharply higher over the course of the trading day on Tuesday. The gains on the day offset the weakness seen in the two previous sessions, with the Nasdaq and the S&P 500 reaching their best closing levels in over a month.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow climbed 139.55 points or 0.8 percent to 17,868.76, the Nasdaq jumped 61.63 points or 1.3 percent to 4,787.64 and the S&P 500 surged up 21.85 points or 1.1 percent to 2,068.59.

The strength on Wall Street was partly due to optimism about Greek debt negotiations amid reports that eurozone officials are considering extending Greece's bailout program by up to six months.

Reports said the European Commission planned to offer the proposal amid indications that the new Greek government is softening its rhetoric behind the scenes.

Peter Boockvar, managing director at the Lindsey Group, said comments by Finance Minister Yanis Varoufakis suggesting that Greece will adhere to 70 percent of the reforms in the current bailout agreement seemed to have been the first step of backing off their original demands.

Meanwhile, traders seemed to shrug off comments from German Finance Minister Wolfgang Schaeuble, who declared the reports about a six-month extension "false."

While Schaeuble said an emergency meeting of euro area finance ministers on Wednesday will not result in a new bailout agreement for Greece, traders still expect a compromise to be reached eventually.

The markets also benefited from a positive reaction to some upbeat corporate news, with beverage giant Coca-Cola (KO) seeing notable strength after reporting better than expected fourth quarter results.

Shares of Aeropostale (ARO) also moved sharply higher on the day after the apparel retailer narrowed its fourth quarter loss forecast.

On the other hand, Coupons.com (COUP) came under pressure after the digital coupon provider offered disappointing guidance.

Sector News

While most of the major sectors moved to the upside on the day, semiconductor stocks turned in a particularly strong performance. The Philadelphia Semiconductor Index surged up by 3.4 percent to its best closing level in over a month.

Micron Technology (MU) helped to lead the semiconductor sector higher, with the chip maker jumping by 9.7 percent.

Significant strength was also visible among telecom stocks, as reflected by the 3.1 percent gain posted by the NYSE Arca Telecom Index. The gain extended a recent recovery by the index, which has offset the sharp pullback seen late last month.

Utilities, airline, health care, and biotechnology stocks also saw considerable strength on the day, while energy and gold stocks bucked the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.3 percent, while China's Shanghai Composite Index surged up by 1.5 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index advanced by 0.9 percent and 1 percent, respectively.

In the bond market, treasuries came under pressure on the day, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.3 basis points to 1.991 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading on Wednesday may be impacted by any developments regarding the Greek debt negotiations.

On the earnings front, PepsiCo (PEP), Time Warner (TWX), and WellCare Group (WCG) are among the companies due to report their quarterly results before the start of trading on Wednesday.