Stocks Close Sharply Higher Following Upbeat Housing Data - U.S. Commentary

(RTTNews) - Stocks moved sharply higher during trading on Tuesday, more than offsetting the modest losses posted in the previous sessions. The major averages showed a strong move to the upside in early trading and remained firmly positive throughout the day.

Going into the close, the major averages moved roughly sideways, hanging on to substantial gains. The Dow jumped 213.12 points or 1.2 percent to 17,706.05, the Nasdaq soared 95.27 points or 2 percent to 4,861.06 and the S&P 500 surged up 28.02 points or 1.4 percent to 2,076.06.

The rally on Wall Street was partly due to bargain hunting, with traders picking up stocks at reduced levels following recent weakness.

With the gains on the day, the major averages continued to regain ground after falling to their lowest levels in about two months last Thursday.

Positive sentiment was also generated by the release of a Commerce Department report showing a sharp jump in new home sales in the month of April.

The Commerce Department said new home sales surged up by 16.6 percent to an annual rate of 619,000 in April from a revised 531,000 in March.

Economists had expected new home sales to climb by 2.3 percent to a rate of 523,000 from the 511,000 originally reported for the previous month.

With the much bigger than expected increase, new home sales reached their highest level since hitting 627,000 in January of 2008.

Sector News

While most of the major sectors moved to the upside on the day, substantial strength was visible among brokerage stocks. The NYSE Arca Broker/Dealer Index surged up by 3.2 percent to its best closing level in almost a month.

Cowen Group (COWN) helped to lead the brokerage sector higher, jumping by 12.1 percent. LPL Financial (LPLA), Interactive Brokers (IBKR) and Charles Schwab (SCHW) also posted standout gains.

Benefiting from the upbeat new home sales data, housing stocks also moved sharply higher on the day. Reflecting the strength in the sector, the Philadelphia Housing Sector Index shot up by 2.8 percent.

Within the housing sector, Toll Brothers (TOL) posted a particularly strong gain after reporting better than expected second quarter results.

Electronic storage, software, semiconductor and networking stocks also saw considerable strength, contributing to the substantial increase by the tech-heavy Nasdaq.

Meanwhile, gold stocks were among the few groups to buck the uptrend, resulting in a ___ percent drop by the NYSE Arca Gold Bugs Index. The weakness in the sector came as gold for June delivery tumbled $22.30 to $1,229.20 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slumped by 0.9 percent, while China's Shanghai Composite Index slid by 0.8 percent.

Meanwhile, the major European markets moved sharply higher on the day. While the U.K.'s FTSE 100 Index surged up by 1.4 percent, the German DAX Index and the French CAC 40 Index jumped by 2.2 percent and 2.5 percent, respectively.

In the bond market, treasuries regained ground after coming under pressure in early trading but still closed modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 1.859 percent.

Looking Ahead

Hewlett Packard Enterprise (HPE) and Intuit (INTU) are among the companies releasing their quarterly results after the close of today's trading.