Stocks Extend Upward Trend On Upbeat Alcoa Earnings - U.S. Commentary

(RTTNews) - After seeing some volatility in early trading, stocks moved mostly higher over the course of the trading day on Tuesday. The gains on the day extended the upward trend that has been shown by the markets over the past two weeks.

The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Dow rose 75.65 points or 0.5 percent to 15,300.34, the Nasdaq climbed 19.43 points or 0.6 percent to 3,504.26 and the S&P 500 advanced 11.86 points or 0.7 percent to 1,652.32.

With the gains, the Nasdaq closed higher for the ninth time in ten sessions, reaching its best closing level since October of 2000. The S&P 500 also reached its best closing level in over a month.

The strength on Wall Street came on the heels of the release of quarterly results from aluminum giant Alcoa (AA), which kicked off the earnings season after the close of trading on Monday.

Alcoa reported second quarter earnings and revenues that exceeded analyst estimates and said it continues to project 7 percent global aluminum demand growth in 2013.

While shares of Alcoa closed modestly lower on the news, the company's results generated some optimism about the outlook for the global economy as well as the remainder of earnings season.

Positive sentiment was also generated by news that eurozone finance ministers agreed to release the next loan installment for Greece in two tranches.

The first tranche of 2.5 billion euros will be released later this month if the Mediterranean nation fulfills its reform pledges.

Nonetheless, trading activity on Wall Street remained somewhat subdued amid another quiet day on the U.S. economic front.

Some traders seemed reluctant to make any significant moves ahead of the release of the minutes of the latest Federal Reserve meeting on Wednesday.

Sector News

Housing stocks turned in some of the market's best performances on the day, driving the Philadelphia Housing Sector Index up by 3.7 percent. The index regained some ground after ending the previous session at a six-month closing low.

D.R. Horton (DHI) helped to lead the housing sector higher, jumping by 7.6 percent, while M/I Homes (MHO) and KB Home (KBH) also posted strong gains.

Significant strength was also visible among transportation stocks, as reflected by the 2.3 percent gain posted by the Dow Jones Transportation Average. The gain lifted the average to its best closing level in well over a month.

Chemical stocks also saw considerable strength on the day, resulting in a 1.7 percent gain by the Dow Jones Chemicals Index.

Steel, commercial real estate, and brokerage stocks also posted notable gains, moving to the upside along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 2.6 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index rose by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index advanced by 1 percent and 1.1 percent, respectively.

In the bond market, treasuries moved modestly higher, continuing to recover from last Friday's sell-off. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.5 basis points to 2.63 percent.

Looking Ahead

Trading on Wednesday may be impacted by the release of the minutes of the latest Fed meeting, which could shed some additional light on the outlook for the central bank's stimulus program.