Stocks Close Mostly Higher, Extending Recent Uptrend - U.S. Commentary

(RTTNews) - Stocks moved steadily higher throughout much of the trading session on Tuesday before ending the day firmly in positive territory. The gains extended a recent upward trend, with the major averages closing higher for the fourth consecutive session.

The major averages gave back some ground going into the close but held on to the bulk of their gains. The Dow climbed 75.90 points or 0.4 percent to 18,053.58, the Nasdaq advanced 33.38 points or 0.7 percent to 5,104.89 and the S&P 500 rose 9.35 points or 0.5 percent to 2,108.95.

The continued strength on Wall Street came even though the Commerce Department released a report before the start of trading showing an unexpected drop in retail sales in the month of June.

The report said retail sales fell by 0.3 percent in June compared to economist estimates for an increase of about 0.3 percent. The unexpected drop came following a downwardly revised 1.0 percent jump in May.

Excluding a steep drop in auto sales, retail sales still edged down by 0.1 percent in June compared to a 0.8 percent increase in May. Ex-auto sales had been expected to climb by 0.5 percent.

The buying interest seen following the report may reflect speculation that the data will lead the Federal Reserve to delay its first interest rate hike.

Analysts also suggested that the unexpected drop in sales is not as bad as it appears in light of the jump in sales seen in the previous month.

James Knightley, an economist at ING Bank, said, "It is possible that the early Memorial Day holiday has boosted sales in May at the expense of June."

Traders also continued to react positively to news that Greece finally reached an agreement with its international creditors over the weekend.

While analysts have noted that Greece still has some big hurdles to clear to finalize a new bailout, traders can now turn their attention to the latest U.S. economic data and earnings news.

Sector News

Biotechnology stocks moved sharply higher as the day progressed, driving the NYSE Arca Biotechnology Index up by 2.7 percent. With the gain, the index ended the session at a new record closing high.

Celldex Therapeutics (CLDX), Exact Sciences (EXAS), and Isis Pharmaceuticals (ISIS) turned in some of the biotech sector's best performances.

Significant strength was also visible among oil service stocks, as reflected by the 1.5 percent gain posted by the Philadelphia Oil Service Index. The index continued to regain ground after ending last Wednesday's trading at its worst closing level in well over three months.

The strength among oil service stocks came as news of an agreement on Iran's nuclear program generated optimism about increased oil drilling business in the Islamic republic.

Natural gas, semiconductor, and healthcare stocks also moved notably higher, while steel stocks gave back some ground after rising sharply on Monday.

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 Index shot up by 1.5 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets all moved higher over the course of the trading day. While the French CAC 40 Index advanced by 0.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index rose by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries regained some ground after trending lower over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.399 percent.

Looking Ahead

U.S. economic data may continue to attract attention on Wednesday, with traders likely to keep an eye on reports on producer prices, industrial production, and New York manufacturing activity.

Federal Reserve Chair Janet Yellen is also scheduled to testify before the House Financial Services Committee, potentially providing additional insight regarding the outlook for interest rates.

On the earnings front, Bank of America (BAC) and Delta Air Lines (DAL) are among the companies due to report their quarterly results before the start of trading on Wednesday.