Bargain Hunting Leads To Substantial Rebound On Wall Street - U.S. Commentary

(RTTNews) - After falling sharply over the course of the two previous sessions, stocks showed a substantial move back to the upside during trading on Tuesday.

The major averages finished the session at their best levels of the day. The Dow surged up 269.48 points or 1.6 percent to 17,409.72, the Nasdaq soared 97.42 points or 2.1 percent to 4,691.87 and the S&P 500 jumped 35.55 points or 1.8 percent to 2,036.09.

The rebound on Wall Street came amid bargain hunting, with traders picking up stocks at reduced levels following the recent sell-off.

The steep drop seen in the two sessions following the Brexit vote dragged the Dow and the S&P 500 down to their lowest closing levels in over three months, while the Nasdaq hit a four-month closing low.

Nonetheless, lingering concerns about the economic impact of the Brexit prevented the markets from recovering all of the lost ground.

On the U.S. economic front, the Commerce Department released a report showing that economic activity increased faster than previously estimated in the first quarter of 2016.

The Commerce Department said the pace of growth in gross domestic product was upwardly revised to 1.1 percent from the previous estimate of 0.8 percent.

The revised GDP growth in the first quarter compares to the 1.4 percent jump seen in the fourth quarter and the 1.0 percent increase expected by economists.

A separate report from the Conference Board showed a much bigger than expected improvement in consumer confidence in the month of June.

The Conference Board said its consumer confidence index jumped to 98.0 in June from a revised 92.4 in May. Economists had been expecting the index to inch up to 93.3.

Sector News

Most of the major sectors moved back to the upside on the day, reflecting broad based buying interest on Wall Street.

Biotechnology stocks posted particularly strong gains, resulting in a 4.4 percent jump by the NYSE Arca Biotechnology Index. The gain by the index came after it ended the previous session at its lowest closing level in three months.

Intercept Pharmaceuticals (ICPT), Novavax (NVAX), and Ionis Pharmaceuticals (IONS) turned in some of the biotech sector's best performances.

Considerable strength was also visible among natural gas stocks, as reflected by the 3.9 percent gain posted by the NYSE Arca Natural Gas Index. The index bounced off a more than one-month closing low.

Steel stocks also showed a substantial move to the upside, driving the NYSE Arca Steel Index up by 3.7 percent. Mechel (MTL) and Brazil's CSN (SID) posted standout gains.

Electronic storage, banking, airline, railroad, and semiconductor stocks also saw significant strength, while gold stocks bucked the uptrend amid a decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Tuesday. Japan's Nikkei 225 Index crept up by 0.1 percent, while Hong Kong's Hang Seng Index edged down by 0.3 percent.

Meanwhile, the major European markets all moved sharply higher on the day. While the German DAX Index surged up by 1.9 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both soared by 2.6 percent.

In the bond market, treasuries showed a lack of direction throughout the day before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.461 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to reports on personal income and spending and pending home sales.

Any further developments regarding the Brexit could also impact trading following the volatility seen over the past few sessions.