Stocks Regain Ground Following Yesterday's Sell-Off - U.S. Commentary

(RTTNews) - Following the sell-off seen in the previous session, stocks showed a strong move back to the upside during trading on Tuesday. The major averages initially showed a lack of direction but climbed firmly into positive territory as the day progressed.

The major averages held on to notable gains going into the final hour of trading. The Dow soared 389.17 points or 1.7 percent to 24,033.36, the Nasdaq jumped 71.16 points or 1 percent to 6,941.28 and the S&P 500 surged up 32.57 points or 1.3 percent to 2,614.45.

Bargain hunting contributed to the strength on Wall Street, with traders picking up stocks at reduced levels after the sharp decline seen on Monday.

Concerns about a potential trade war contributed to the steep losses in the previous session, which pulled the Nasdaq and the S&P 500 down to their lowest closing levels in almost two months.

The markets also benefited from significant rebounds by some technology stocks, including electric car maker Tesla (TSLA).

After ending the previous session at its lowest closing level in a year, Tesla jumped by 6 percent as the company missed first quarter production targets but said it does not require an equity or debt raise this year.

Shares of Amazon (AMZN) also moved back to the upside on the day even though President Donald Trump continued to attack the online retail giant.

Meanwhile, traders were also looking ahead to the release of the Labor Department's closely watched monthly employment report on Friday.

Reports on private sector employment, service sector activity, factory orders, and international trade may also attract attention in the coming days.

Sector News

Energy stocks showed a significant move to the upside on the day, benefiting from a rebound by the price of crude oil. Crude for May delivery climbed $0.50 to $63.51 a barrel after plunging $1.93 to $63.01 a barrel on Monday.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 2.3 percent and the NYSE Arca Oil Index jumped by 2.1 percent.

Considerable strength was also visible among semiconductor stocks, which regained ground following recent weakness. The Philadelphia Semiconductor Index advanced by 2 percent, bouncing off its lowest closing level in almost two months.

Tobacco, transportation, chemical, and banking stocks also saw notable strength, while gold stocks pulled back along with the price of the precious metal.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region followed U.S. stocks lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.5 percent, while China's Shanghai Composite Index slid by 0.9 percent.

The major European markets also moved to the downside on the day. While the German DAX Index slid by 0.8 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index dropped by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries gave back ground after ending the previous session slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 5.2 basis points to 2.784 percent.

Looking Ahead

A batch of economic data may attract attention on Wednesday, with traders likely to keep an eye on reports on private sector employment, service sector activity, and factory orders.