Major Averages Continue To Turn In Mixed Performance - U.S. Commentary

(RTTNews) - After moving in opposite directions earlier in the session, the major averages continue to turn in a mixed performance during trading on Tuesday. The Dow and the S&P 500 are holding on to modest gains, while the Nasdaq remains in the red.

In recent trading, the Nasdaq has pulled back more firmly into negative territory and is currently down 28.45 points or 0.6 percent at 4,931.56. Meanwhile, the Dow is up 14.55 points or 0.1 percent at 18,018.71 and the S&P 500 is up 1.46 points or 0.1 percent at 2,095.80.

The Dow and the S&P 500 are extending the upward move seen over the course of the previous session, rising to their best levels in months.

Earlier in the session, the Dow reached its best intraday level since last July, while the S&P 500 rose to a nearly five-month intraday high.

The gain by the Dow is partly due to strong performances by Goldman Sachs (GS), UnitedHealth (UNH), and Johnson & Johnson (JNJ), which have moved higher after reporting better than expected first quarter earnings.

Meanwhile, a steep drop by shares of IBM (IBM) has limited the upside for the blue chip index. IBM is down by 6.3 percent after reporting first quarter earnings and revenues that fell year-over-year.

Shares of Illumina (ILMN) ad Netflix (NFLX) have also come under pressure on the day, contributing to the pullback by the tech-heavy Nasdaq.

Illumina is currently down by 24.7 percent after warning of weaker than expected first quarter revenue, while Netflix is down by 11.1 percent after providing disappointing subscriber growth guidance.

On the U.S. economic front, the Commerce Department released a report before the start of trading showing a sharp pullback in housing starts in the month of March.

The report said housing starts tumbled by 8.8 percent to an annual rate of 1.089 million in March after jumping by 6.9 percent to a revised 1.194 million in February.

Economists had expected housing starts to dip by about 0.9 percent to a rate of 1.167 million compared to the 1.178 million originally reported for the previous month.

Building permits, an indicator of future housing demand, also slumped by 7.7 percent to a rate of 1.086 million in March from a revised 1.177 million in February.

The decrease surprised economists, who had expected building permits to climb 2.8 percent to a rate of 1.200 million from the 1.167 originally reported for the previous month.

Sector News

Benefiting from a sharp increase by the price of crude oil, energy stocks continue to recover from the early weakness seen in the previous session.

The Philadelphia Oil Service Index has surged up by 3.8 percent to a four-month high, while the NYSE Arca Natural Gas Index has jumped by 2.7 percent to its best levels in almost five months.

Crude oil for May delivery is currently jumping $1.38 to $41.16 a barrel, as an oil workers strike has slashed production in Kuwait.

Substantial strength also remains visible among gold stocks, as reflected by the 3.4 percent gain being posted by the NYSE Arca Gold Bugs Index. The strength in the sector comes as gold for June delivery has shot up $21.20 to $1,256.20 an ounce.

Steel, chemical, railroad, and banking have also shown strong moves to the upside on the day, while notable weakness is visible among biotechnology, internet, and semiconductor stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region showed a strong move back to the upside on Tuesday. Japan's Nikkei 225 Index surged up by 3.7 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.

The major European markets also moved notably higher on the day. While the German DAX Index shot up by 2.3 percent, the French CAC 40 Index spiked by 1.3 percent and the U.K.'s FTSE 100 Index advanced by 0.8 percent.

In the bond market, treasuries are extending the moderate decrease seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.4 basis points at 1.797 percent.