10.05.2016 18:06:01

Stocks Moving Notably Higher Amid Rebound In Oil Prices - U.S. Commentary

(RTTNews) - Stocks have moved notably higher over the course of the trading session on Tuesday on the heels of the choppy trading seen in the previous session. The Nasdaq is moving higher for the third straight day after hitting its lowest levels in nearly two months.

The major averages have seen further upside in recent trading, reaching new highs for the session. The Dow is up 188.40 points or 1.1 percent at 17,894.31, the Nasdaq is up 38.07 points or 0.8 percent at 4,788.28 and the S&P 500 is up 19.64 points or 0.1 percent at 2,078.33.

The strength on Wall Street is partly due to a notable rebound by the price of crude oil, which fell sharply on Monday due in part to the release of disappointing Chinese trade data.

The price of crude oil for June delivery is currently jumping $0.97 to $44.41 a barrel after slumping $1.22 to $43.44 a barrel in the previous session.

The rebound by the price of crude oil comes amid supply disruptions due to a wildfire in Canada and unrest in Nigeria.

Commodities may also be benefiting from tame Chinese inflation data, which generated some optimism about further monetary policy maneuvers.

Data released by the Chinese National Bureau of Statistics showed that annual consumer price inflation remained steady at 2.3 percent for the third straight month in April.

Meanwhile, Chinese producer prices fell 3.4 percent year-over-year in April after falling by 4.3 percent in March. Prices declined for the 50th straight month.

On the U.S. economic front, the Commerce Department released a report this morning showing a modest rebound in wholesale inventories in the month of March.

The Commerce Department said wholesale inventories inched up by 0.1 percent in March after falling by a revised 0.6 percent in February. The report also showed a 0.7 percent increase in wholesale sales.

The data does not typically impact the markets, however, and traders likely continue to look ahead to more closely watched reports on retail sales and producer prices on Friday.

Among individual stocks, home soda machine maker SodaStream (SODA) has moved sharply higher after reporting first quarter results that exceeded analyst estimates.

Shares of Allergan (AGN) have also moved to the upside after the drug maker reported better than expected first quarter earnings and announced a $10 billion stock buyback.

On the other hand, SolarCity (SCTY) has come under pressure after the solar company reported a wider than expected first quarter loss and lowered its guidance for solar panel installations.

Sector News

Brokerage stocks are seeing considerable strength in mid-day trading, with the NYSE Arca Broker/Dealer Index jumping by 2.2 percent. With the gain, the index is rebounding after ending the previous session at its lowest closing level in a month.

Stifel Financial (SF) has helped to lead the brokerage sector higher, jumping by 10.6 percent after reporting better than expected first quarter results.

Significant strength is also visible among railroad stocks, as reflected by the 1.9 percent gain being posted by the Dow Jones Railroads Index. The index is regaining some ground after trending lower over the past couple weeks.

Energy stocks have also shown a strong move to the upside, benefiting from the substantial rebound by the price of crude oil.

Most of the other major sectors have also moved higher on the day, with notable strength visible among steel, banking, and internet stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 2.2 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index climbed by 0.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index both advanced by 0.7 percent.

In the bond market, treasuries are showing a lack of direction after ending the previous session modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is unchanged at 1.760 percent.

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