Stocks moved sharply higher over the course of the trading day on Tuesday, regaining ground following the sell-off seen in the previous session. The major averages all showed strong moves back to the upside but remain well off their record highs.
The major averages pulled back off their best levels going into the close but held on to strong gains. The Dow spiked 549.95 points or 1.6 percent to 34,511.99, the Nasdaq surged up 223.89 points or 1.6 percent to 14,498.88 and the S&P 500 jumped 64.57 points or 1.5 percent to 4,323.06.
The rebound on Wall Street came as traders picked up stocks at relatively reduced levels after the steep drop seen on Monday dragged the major averages down to their lowest levels in almost a month.
A positive reaction to the latest earnings news also contributed to strength on Wall Street, with tech giant IBM Corp. (IBM) moving notably higher after reporting better than expected second quarter results.
HCA Healthcare (HCA) also spiked after the hospital company reported second quarter results that exceeded analyst estimates on both the top and bottom lines.
Halliburton (HAL) and J.B. Hunt Transport Services (JBHT) also posted strong gains after reporting better than expected second quarter earnings.
In U.S. economic news, the Commerce Department released a report showing a substantial increase in new residential construction in the month of June.
The Commerce Department said housing starts spiked by 6.3 percent to an annual rate of 1.643 million in June after jumping by 2.1 percent to a revised rate of 1.546 million in May.
Economists had expected housing starts to increase by 1.1 percent to a rate of 1.590 million from the 1.572 million originally reported for the previous month.
Meanwhile, the report showed building permits tumbled by 5.1 percent to an annual rate of 1.598 million in June after slumping by 2.9 percent to a revised rate of 1.683 million in May.
Building permits, an indicator of future housing demand, had been expected to climb by 1.1 percent to a rate of 1.700 million from the 1.681 million originally reported for the previous month.
Airline stocks showed a substantial rebound on the day, with the NYSE Arca Airline Index soaring by 5.8 percent after ending the previous session at its lowest closing level in over five months.
Bargain hunting also contributed to considerable strength among banking stocks, driving the KBW Bank Index up by 3.2 percent. The index bounced off a nearly four-month closing low.
Oil service stocks also saw significant strength, resulting in a 2.5 percent jump by the Philadelphia Oil Service Index.
The rebound by oil service stocks comes as the price of crude oil for August delivery climbed $1 to $67.42 a barrel after plunging $5.39 to $66.42 a barrel on Monday.
Computer hardware, housing and brokerage stocks also moved notably higher on the day, reflecting broad based strength on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slid by 1 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets rebounded after ending the previous session sharply lower. While the French CAC 40 Index advanced by 0.8 percent, the German DAX Index and the U.K.’s FTSE Index climbed by 0.6 percent and 0.5 percent, respectively.
In the bond market, treasuries turned lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points at 1.209 percent.
Reaction to the latest batch of earnings news may drive trading on Wednesday amid a quiet day on the U.S. economic front.
Netflix (NFLX), United Airlines (UAL) Intuitive Surgical (ISRG) and Chipotle Mexican Grill (CMG) are among the companies releasing their quarterly results after the close of today’s trading.
Coca-Cola (KO), Johnson & Johnson (JNJ), Harley-Davidson (HOG), and Verizon (VZ) are also among the companies due to report their quarterly results before the start of trading on Wednesday.
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