U.S. Stocks See Further Upside Amid Pullback By Treasury Yields

(RTTNews) - Stocks have moved mostly higher in morning trading on Tuesday, extending the rally seen over the two previous sessions. With the continued advance, the Dow and the S&P 500 have reached their best intraday levels in over a month.

Currently, the major averages are just off their highs of the session. The Dow is up 200.81 points or 0.6 percent at 31,700.43, the Nasdaq is up 179.15 points or 1.6 percent at 11,131.76 and the S&P 500 is up 39.71 points or 1.1 percent at 3,837.05.

The extended rally on Wall Street comes amid a sharp pullback by treasury yields, with the yield on the benchmark ten-year note showing a steep drop after ending the previous session at a fourteen-year closing high.

The pullback by treasury yields comes as traders continue to express optimism the Federal Reserve will signal a slower pace of interest rate hikes following its meeting next week.

The Fed is widely expected to raise interest rates by another 75 basis points next week, although CME Group's FedWatch Tool shows the chances for a 50 or 75 basis point rate hike in December are split roughly fifty-fifty.

The markets are also benefiting from a positive reaction to the latest earnings news, with General Motors (GM) and UPS (UPS) posting strong gains after reporting better than expected third quarter earnings.

Coca-Cola (KO) has also move to the upside after reporting third quarter results that beat analyst estimates on both the top and bottom lines.

On the other hand, shares of 3M (MMM) are seeing modest weakness after the conglomerate reported mixed third quarter results and lowered its full-year guidance.

Traders may also be expressing optimism about the upcoming release of quarterly results from several tech giants, with Alphabet (GOOGL) and Microsoft (MSFT) reporting their results after the close of trading.

Interest rate-sensitive commercial real estate stocks have moved sharply higher in morning trading, driving the Dow Jones U.S. Real Estate Index up by 2.5 percent.

Substantial strength has also emerged among semiconductor stocks, as reflected by the 2.5 percent surge by the Philadelphia Semiconductor Index.

Biotechnology stocks are also turning in a strong performance on the day, with the NYSE Arca Biotechnology Index jumping by 2.4 percent.

Housing, networking and computer hardware stocks are also seeing considerable strength on the day, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index shot up by 1.0 percent, while China's Shanghai Composite Index closed just below the unchanged line.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.2 percent, the U.K.'s FTSE 100 Index is down by 0.8 percent and the German DAX Index is down by 1.0 percent.

In the bond market, treasuries have moved sharply higher following the notable downtrend seen over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 16.1 basis points at 4.073 percent.