Stocks moved sharply higher in early trading on Tuesday and continue to turn in a strong performance in the early afternoon. With the upward move, the major averages have largely offset the steep drop seen in the previous session.

The major averages have seen further upside in recent trading, reaching new highs for the session. The Dow is up 611.89 points or 1.8 percent at 34,573.93, the Nasdaq is up 206.41 points or 1.5 percent at 14,481.40 and the S&P 500 is up 67.43 points or 1.6 percent at 4,325.92.

The rebound on Wall Street comes as traders pick up stocks at relatively reduced levels after the sell-off seen on Monday dragged the major averages down to their lowest levels in almost a month.

A positive reaction to the latest earnings news is also contributing 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) has 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) are also posting strong gains after reporting better than expected second quarter earnings.

On the economic front, 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.

Sector News

Airline stocks continue to see substantial strength in mid-day trading, with the NYSE Arca Airline Index soaring by 4.8 percent after ending the previous session at its lowest closing level in over five months.

Bargain hunting has also contributed to considerable strength among banking stocks, driving the KBW Bank Index up by 3.9 percent. The index is bouncing off a nearly four-month closing low.

Oil service stocks are also seeing significant strength, resulting in a 3.2 percent spike by the Philadelphia Oil Service Index.

The rebound by oil service stocks comes as the price of crude oil for August delivery is climbing $0.65 to $67.07 a barrel after plunging $5.39 to $66.42 a barrel on Monday.

Brokerage, computer hardware and housing stocks have also moved notably higher on the day, reflecting broad based strength on Wall Street.

Other Markets

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 rose 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, is up by 2.8 basis points at 1.209 percent.

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