U.S. Stocks Seeing Modest Strength, Extending Recent Upward Trend
Stocks are seeing modest strength during trading on Tuesday, extending the strong upward move seen over the past several sessions. Buying interest has remained somewhat subdued, however, limiting the upside for the major averages.
The tech-heavy Nasdaq has been bouncing back and forth across the unchanged line but is currently up 28.30 points or 0.2 percent at 16,377.54. The Dow is up 111.34 points or 0.3 percent at 38,963.61 and the S&P 500 is up 14.60 points or 0.3 percent at 5,195.34.
The modest strength on Wall Street comes as stocks continue to benefit from renewed optimism about the outlook for interest rates.
Relatively dovish comments from Federal Reserve Chair Jerome Powell combined with weaker-than-expected job growth in April have largely eliminated short-lived concerns the Fed might actually consider raising rates.
Investors have instead grown increasingly confident about a rate cut in the coming months, with the chances rates will be lower by September now at 89.1 percent, according to CME Group’s FedWatch Tool.
However, traders seem reluctant to make more significant moves as they take a breather following the notable advance in recent sessions. The surge has lifted the major averages to their best levels in almost a month.
Among individual stocks, shares of Hims & Hers Health (HIMS) have moved sharply higher after the telehealth company reported better than expected first quarter results and provided upbeat second quarter revenue guidance.
Apparel retailer Gap (GPS) has also shown a strong move to the upside after Citi upgraded its rating on the company’s stock to Buy from Neutral.
On the other hand, shares of Disney (DIS) are seeing significant weakness even though the entertainment giant reported better than expected fiscal third quarter earnings.
Sector News
Most of the major sectors are showing only modest moves on the day, reflecting the lackluster performance by the broader markets.
Oil service and telecom stocks are seeing notable strength, however, with the Philadelphia Oil Service Index and the NYSE Arca North American Telecom Index both climbing by 1.0 percent.
Commercial real estate and housing stocks have also moved to the upside, while airline stocks are seeing significant weakness, dragging the NYSE Arca Airline Index down by 2.0 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 1.6 percent and South Korea’s Kospi surged by 2.2 percent, while China’s Shanghai Composite Index crept up by 0.2 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index has shot up by 1.3 percent, the U.K.’s FTSE 100 Index is up by 1.2 percent and the French CAC 40 Index is up by 0.9 percent.
In the bond market, treasuries are extending the upward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.4 basis points at 4.435 percent.
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