Stocks Manage To End Volatile Trading Day Mostly Higher - U.S. Commentary

(RTTNews) - With traders digesting a mixed batch of catalysts, stocks saw considerable volatility over the course of the trading day on Tuesday before closing mostly higher. The gains on the day extended the recovery off the two-month lows set last Friday.

The major averages showed a notable rebound in afternoon trading to end the day in positive territory. The Dow rose 89.32 points or 0.6 percent to 16,262.56, the Nasdaq edged up 11.47 points or 0.3 percent to 4,034.16 and the S&P 500 climbed 12.37 points or 0.7 percent to 1,842.98.

The higher close on Wall Street partly reflected a positive reaction to the latest earnings news, including results from Dow components Coca-Cola (KO) and Johnson & Johnson (JNJ).

Shares of Coca-Cola surged up by 3.7 percent after the beverage giant reported first quarter earnings that matched analyst estimates.

Healthcare giant Johnson & Johnson also ended the day up by 2.1 percent after reporting better than expected first quarter earnings and raising its full-year guidance.

On the other hand, some negative sentiment was generated by disappointing economic data, including a report from the National Association of Home Builders showing that homebuilder confidence has improved by less than expected in April.

The report showed that the NAHB/Wells Fargo Housing Market Index edged up to 47 in April from a downwardly revised 46 in March, while economists had expected the index to climb to 49.

The New York Federal Reserve also released a report showing an unexpected drop by its reading on regional manufacturing activity in the month of April.

The general business conditions index dropped to 1.3 in April from 5.6 in March, although a positive reading indicates growth in regional manufacturing activity. The drop surprised economists, who had expected the index to climb to reading of 8.0.

Meanwhile, the Labor Department released a report showing that consumer prices rose by slightly more than expected in the month of March, reflecting higher prices for shelter and food.

Escalating tensions in eastern Ukraine also weighed on the minds of traders amid concerns about the possibility of a civil war.

Sector News

After ending the previous session notably higher, oil service stocks saw some further upside on the day. The Philadelphia Oil Service Index advanced by 1.4 percent, reaching its best closing level in three years.

Core Laboratories (CLB) and Cameron International (CAM) turned in two of the oil service sector's best performances, climbing by 2.5 percent and 2.3 percent, respectively.

Significant strength also emerged among utilities stocks, as reflected by the 1.3 percent gain posted by the Dow Jones Utilities Average. With the gain, the average ended the session at a six-year closing high.

Railroad, software, and commercial real estate stocks also moved notably higher over the course of the trading day.

Meanwhile, substantial weakness was visible among gold stocks, as reflected by the 2.1 percent loss posted by the NYSE Arca Gold Bugs Index. The weakness in the sector came as gold for June delivery tumbled $27.20 to $1,300.30 an ounce.

Steel stocks also came under considerable selling pressure on the day, dragging the NYSE Arca Steel Index down by 2 percent.

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 rose by 0.6 percent, while Hong Kong's Hang Seng Index slumped by 1.6 percent.

Meanwhile, the major European markets all came under pressure on the day. While the German DAX Index tumbled by 1.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.9 percent and 0.6 percent, respectively.

In the bond market, treasuries saw considerable volatility over the course of the session before closing modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 2.628 percent.

Looking Ahead

While traders are likely to keep an eye on any developments in Ukraine, trading on Wednesday may also be impacted by the release of reports on housing starts and industrial production.

Remarks by Federal Reserve Chair Janet Yellen may also attract some attention along with the release of the Fed's Beige Book.

Reaction to earnings news Intel (INTC) and Yahoo (YHOO) could also impact trading, with the tech giants due to releasing their quarterly results after the close of today's trading.