Stocks See Initial Strength Following Last Week's Pullback - U.S. Commentary

(RTTNews) - Stocks moved sharply higher at the start of trading on Tuesday, regaining some ground after seeing significant weakness last week. The major averages jumped firmly into positive territory but have not seen much follow-through on the initial upward move.

Currently, the major averages are holding on to strong gains but are off their highs for the young session. The Dow is up 263.23 points or 1.6 percent at 16,365.61, the Nasdaq is up 84.11 points or 1.8 percent at 4,768.03 and the S&P 500 is up 29.36 points or 1.5 percent at 1,950.58.

The initial strength on Wall Street was partly in reaction to strength among Chinese stocks, which surged higher in the latter part of the trading day.

China's Shanghai Composite Index jumped by 2.9 percent on the day, contributing to a rally in other overseas markets.

The late-day strength in the Chinese market suggests state intervention despite recent reports indicating the government abandoned attempts to boost the stock market through large-scale share purchases.

Nonetheless, traders seem somewhat reluctant to make more significant moves amid a lack of major U.S. economic data on the day.

The economic calendar remains relatively light throughout the holiday-shortened week, although traders are likely to keep a close eye on reports on weekly jobless claims, producer prices, and consumer sentiment.

Last week's mixed jobs data is likely to increase the focus on the other economic reports due to be released in the days leading up to the Federal Reserve's monetary policy announcement next week.

Semiconductor stocks are seeing considerable strength in early trading, resulting in a 2.9 percent jump by the Philadelphia Semiconductor Index. SunEdison (SUNE) and ON Semiconductor (ON) are posting standout gains.

Steel, railroad, airline, and software stocks are also seeing early strength, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index plunged by 2.4 percent, while Hong Kong's Hang Seng Index surged up by 3.3 percent.

Meanwhile, the major European markets have all moved sharply higher on the day. While the German DAX Index has jumped by 2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are up by 1.5 percent and 1.4 percent, respectively.

In the bond market, treasuries have shown a notable move back to the downside after moving higher last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5 basis points at 2.178 percent.