U.S. Stocks Show Strong Move Back To The Upside

(RTTNews) - Following the sell-off seen in the previous session, stocks showed a strong move back to the upside during trading on Tuesday. The major averages moved significantly higher but remain well off their recent, record highs.

The major averages finished the day firmly in positive territory. The Dow climbed 187.05 points or 0.7 percent to 28,722.85, the Nasdaq surged up 130.37 points or 1.4 percent to 9,269.68 and the S&P 500 jumped 32.61 points or 1 percent to 3,276.24.

Bargain hunting contributed to the strength on Wall Street, as some traders looked to pick up stocks at relatively reduced levels after the sharp drop seen on Monday.

Some traders may have felt yesterday's sell-off was overdone, shrugging off concerns about the economic impact of the coronavirus outbreak.

Adding to the positive sentiment, the Conference Board released a report showing a notable improvement in U.S. consumer confidence in the month of January.

The Conference Board said its consumer confidence index climbed to 131.6 in January from an upwardly revised 128.2 in December.

Economists had expected the consumer confidence index to rise to 127.8 from the 126.5 originally reported for the previous month.

"Consumer confidence increased in January, following a moderate advance in December, driven primarily by a more positive assessment of the current job market and increased optimism about future job prospects," said Lynn Franco, Senior Director, Economic Indicators, at The Conference Board.

She added, "Optimism about the labor market should continue to support confidence in the short-term and, as a result, consumers will continue driving growth and prevent the economy from slowing in early 2020."

Before the start of trading, the Commerce Department released a separate report showing new orders for U.S. manufactured durable goods rebounded by much more than anticipated in the month of December.

The report said durable goods orders surged up by 2.4 percent in December after tumbling by a revised 3.1 percent in November. Economists had expected durable goods orders to rise by 0.5 percent.

Orders for transportation equipment led the rebound, spiking by 7.6 percent in December after plunging by 8.3 percent in November.

Excluding orders for transportation equipment, durable goods orders edged down by 0.1 percent in December after falling by 0.4 percent in November. Economists had expected a 0.2 percent uptick.

Sector News

Semiconductor stocks turned in some of the market's best performances on the day, with the Philadelphia Semiconductor Index surging up by 2.4 percent.

The index rebounded after pulling back sharply over the two previous sessions after reaching a record intraday high last Friday.

Significant strength was also visible among housing stocks, as reflected by the 1.7 percent jump by the Philadelphia Housing Sector Index.

PulteGroup (PHM) posted a standout gain after the homebuilder reported fourth quarter results that beat analyst estimates on both the top and bottom lines.

Software, biotechnology and telecom stocks also saw considerable strength on the day, while gold stocks moved sharply lower amid a pullback by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.6 percent, while South Korea's Kospi plummeted by 3.1 percent.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index surged up by 1.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index both advanced by 0.9 percent.

In the bond market, treasuries gave back some ground after moving sharply higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.6 basis points to 1.641 percent.

Looking Ahead

The Federal Reserve is due to announce its latest monetary policy decision on Wednesday, although the central bank is widely expected to leave interest rates unchanged.

Traders may subsequently pay closer attention to news about the coronavirus outbreak or the latest batch of quarterly results.

Tech giant Apple (AAPL) is among the companies releasing their quarterly results after the close today's trading, along with Advanced Micro Devices (AMD), eBay (EBAY), and Starbucks (SBUX).

AT&T (T), Boeing (BA), Dow (DOW), General Electric (GE), and McDonald's (MCD) are also among the companies due to report their results before the start of trading on Wednesday.