Bargain Hunting Contributes To Strong Rebound On Wall Street - U.S. Commentary

(RTTNews) - After initially showing some volatility, stocks have moved sharply higher over the course of the trading day on Tuesday. The rally on the day has partly offset the sell-off seen in recent sessions, although the major averages remain well off their mid-September highs.

Currently, the major averages are posting strong gains, near their best levels of the day. The Dow is up 123.75 points or 0.8 percent at 16,444.82, the Nasdaq is up 60.55 points or 1.4 percent at 4,274.21 and the S&P 500 is up 21.29 points or 1.1 percent at 1,896.03.

The rebound on Wall Street is largely due to bargain hunting, with traders picking up stocks at reduced levels following the worst three-day slide since 2011.

The pullback on Monday dragged the Dow down to a six-month closing low, while the Nasdaq and the S&P 500 fell to their worst levels in over four months.

Buying interest was also seen in reaction to earnings news from some big-name companies, with shares of Citigroup (C) moving notably higher after the financial giant reported third quarter results that exceeded analyst estimates.

Before the start of trading, Citigroup reported adjusted third quarter earnings of $1.15 per share on revenues of $19.6 billion, while analysts had expected earnings of $1.12 per share on revenues of $19.05 billion.

Domino's Pizza (DPZ) and Wolverine World Wide (WWW) are also posting strong gains after reporting better than expected third quarter earnings.

Not all companies have reacted positively to their quarterly results, however, with Johnson & Johnson (JNJ), JP Morgan (JPM) and Wells Fargo (WFC) all moving to the downside.

Earnings news is likely to remain in focus after the close of trading, as semiconductor giant Intel (INTC) is among the companies due to report their quarterly results.

Sector News

While most of the major sectors are moving higher on the day, airline stocks have shown a particularly strong move back to the upside after falling sharply in recent sessions. The NYSE Arca Airline Index has surged up by 4.5 percent, bouncing off a nearly eight-month intraday low.

American Airlines (AAL), JetBlue (JBLU), and Southwest (LUV) are turning in some of the airline sector's best performances in mid-day trading.

Trucking stocks are also seeing considerable strength, resulting in a 4.1 percent jump by the Dow Jones Trucking Index. J.B. Hunt (JBHT) is posting a standout gain after reporting better than expected third quarter earnings.

Significant strength has also emerged among semiconductor stocks, as reflected by the 3.5 percent gain being posted by the Philadelphia Semiconductor Index. The gain by the index comes after it ended the previous session at its lowest closing level in eight months.

Railroad, steel, oil service, and commercial real estate stocks are also turning in strong performances amid the broad based rally on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 plunged by 2.4 percent, while Australia's All Ordinaries Index jumped by 1 percent.

Meanwhile, the major European markets all saw modest strength on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index both edged up by 0.2 percent.

In the bond market, treasuries have moved notably higher, extending their recent upward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.9 basis points at 2.227 percent.