U.S. Stocks Reach New Record Highs Ahead Of Fed Announcement

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Tuesday, with the major averages once again reaching new record closing highs. The continued strength on the day came even as traders looked ahead to the Federal Reserve's monetary policy announcement on Wednesday.

The major averages all finished the day moderately higher. The Dow advanced 138.79 points or 0.4 percent to 36,052.63, the Nasdaq rose 53.69 points or 0.3 percent to 15,649.60 and the S&P 500 climbed 16.98 points or 0.4 percent to 4,630.65.

The strength that emerged on Wall Street partly reflected recent upward momentum, as traders reacted to another batch of upbeat earnings news.

Athletic apparel maker Under Armour (UAA) moved sharply higher after reporting third quarter earnings that exceeded analyst estimates and raising its full-year outlook.

Shares of Pfizer (PFE) also showed a strong move to the upside after the drugmaker reported better than expected third quarter results and raised its full-year guidance.

Chemical maker DuPont (DD) also posted a standout gain after reporting third quarter results that exceeded expectations.

DuPont also announced an agreement to acquire materials technology company Rogers Corp. (ROG) for $5.2 billion in cash.

Overall trading activity was somewhat subdued, however, as traders were reluctant to make more significant moves ahead of the Fed announcement.

The Fed is expected to announce plans to begin gradually scaling back its $120 billion in monthly bond purchases by mid-November or December.

The language of the Fed's statement is likely to be in focus as traders look for clues about the outlook for interest rates amid concerns about the high rate of inflation.

A lack of major U.S. economic data also kept some traders on the sidelines ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

Sector News

Transportation stocks moved sharply higher on the day, driving the Dow Jones Transportation Average up by 6.9 percent to a record closing high.

Shares of Avis Budget (CAR) led the sector higher, skyrocketing by 108.3 percent after the car rental company reported better than expected third quarter results.

Substantial strength was also visible among networking stocks, as reflected by the 3.9 percent spike by the NYSE Arca Networking Index. The index also reached a new record closing high.

Arista Networks (ANET) soared after the networking company reported better than expected third quarter results and provided upbeat guidance. Arista also announced a $1 billion share repurchase program and a four-for-one stock split.

Computer hardware stocks also turned in a strong performance on the day, resulting in a 2.4 percent jump by the NYSE Arca Computer Hardware Index.

Chemical, semiconductor and pharmaceutical stocks also moved notably higher, while steel, oil and housing stocks moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index slumped by 1.1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the French CAC 40 Index rose by 0.5 percent and the German DAX Index advanced by 0.9 percent.

In the bond market, treasuries moved to the upside after ending the previous session modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.6 basis points to 1.549 percent.

Looking Ahead

The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing separate reports on private sector employment, service sector activity and factory orders.

Earnings news may also continue to attract attention, with a number of well-known companies releasing their quarterly results after the close of today's trading and before the start of trading on Wednesday.