Stocks Benefit From Upward Momentum To Reach New Record Highs - U.S. Commentary

(RTTNews) - Stocks moved moderately higher during trading on Tuesday, adding to the gains posted in the previous session. With the strength on the day, the major averages once again reached new record closing highs.

The major averages ended the day in positive territory but off their highs of the session. The Dow climbed 67.18 points or 0.4 percent to 19,023.87, the Nasdaq rose 17.49 points or 0.3 percent to 5,386.35 and the S&P 500 edged up 4.76 points or 0.2 percent to 2,202.94.

The strength on Wall Street came as stocks continued to benefit from the upward momentum seen following President-elect Donald Trump's upset victory over Hillary Clinton.

Traders seem optimistic about the outlook for the economy under Trump, leading traders to move money into stocks and out of assets such as bonds.

Positive sentiment was also generated by the release of a report from the National Association of Realtors showing that existing home sales unexpectedly climbed to their highest rate in nearly a decade in October.

NAR said existing home sales rose by 2.0 percent to an annual rate of 5.60 million in October after jumping by 3.6 percent to a revised 5.49 million in September.

The increase surprised economists, who had expected existing home sales to drop by 0.9 percent to a rate of 5.42 million in October from the 5.47 million originally reported for the previous month.

With the unexpected increase, existing home sales rose to their highest rate since reaching 5.79 million in February of 2007.

Among individual stocks, shares of Dollar Tree (DLTR) moved sharply higher after the discount retailer reported better than expected third quarter earnings and raised its guidance for the fourth quarter.

Soup maker Campbell Soup (CPB) also moved to the upside after reporting first quarter earnings and revenues that exceeded analyst estimates. The company also said it is optimistic about 2017.

On the other hand, shares of Medtronic (MDT) came under pressure after the medical equipment maker reported second quarter earnings that came in above analyst estimates but cut its full-year guidance.

Sector News

Steel stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Steel Index up by 6 percent. With the jump, the index reached a nearly two-year closing high.

The strength among steel stocks came on the heels of Trump's pledge to pull out of the massive free trade deal known as the Trans-Pacific Partnership on his first day in office.

Considerable strength was also visible among telecom stocks, as reflected by the 1.6 percent gain posted by the NYSE Arca Telecom Index. The index reached its best closing level in over a month.

Commercial real estate, retail, and semiconductor stocks also saw significant strength, while biotechnology and pharmaceutical stocks came under pressure on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index jumped by 1.4 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.6 percent, the French CAC 40 Index and the German DAX Index climbed by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries regained some ground after trending lower over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.8 basis points to 2.321 percent.

Looking Ahead

A slew of economic data is likely to attract attention on Wednesday, with reports on weekly jobless claims, durable goods orders, new home sales, and consumer sentiment are all due to be released.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which could shed some additional light on the outlook for interest rates.

On the earnings front, Hewlett Packard Enterprise (HPE) and HP Inc. (HPQ) are releasing their quarterly results after the close of today's trading.