Positive Reaction To Putin Comments Drives Stocks Higher - U.S. Commentary

(RTTNews) - After ending the previous session firmly in positive territory, stocks saw some further upside over the course of the trading day on Tuesday. The markets benefited from a positive reaction to comments from Russian President Vladimir Putin.

The major averages all moved higher on the day, although the tech-heavy Nasdaq outperformed its counterparts. While the Nasdaq jumped 53.36 points or 1.3 percent to 4,333.31, the Dow rose 88.97 points or 0.6 percent to 16,336.19 and the S&P 500 advanced 13.42 points or 0.7 percent to 1,872.25.

The continued strength on Wall Street came on the heels of Putin's remarks before a joint session of the Russian parliament.

Traders seemed relieved in response to Putin's claims that he does not plan to seize any other regions of Ukraine following the annexation of Crimea.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "While Putin said today that he doesn't want to split up Ukraine, which in turn boosted European and U.S. stocks, the next big event is May 25th. That is when Ukrainians go to the polls to elect their next President."

"If a pro Russian leader wins, Putin has in essence taken over the whole country and make no mistake, he will be doing his best to get his first choice elected," he added.

Meanwhile, traders largely shrugged off reports that a Ukrainian serviceman was killed by masked gunmen at a military facility on the outskirts of the Crimean capital Simferopol.

Ukrainian Prime Minister Arseny Yatseniuk claimed the incident is shifting the conflict from a political one to a military one.

Traders were looking ahead to the announcement of the Federal Reserve's latest monetary policy decision on Wednesday.

The Fed is widely expected to announce plans to scale back its asset purchase program by another $10 billion to $55 billion per month.

Following the announcement at about 2 pm ET, Janet Yellen is scheduled to hold her first press conference as Fed Chair at about 2:30 pm ET.

On the economic front, the Commerce Department released a report before the start of trading showing that housing starts fell modestly in February but from a notably upwardly revised level in January.

A separate report released by the Labor Department showed a modest increase in consumer prices in the month of February.

Sector News

Biotechnology stocks showed a substantial move to the upside over the course of the trading day, driving the NYSE Arca Biotechnology Index up by 3.3 percent. With the gain, the index climbed further off the nearly one-month closing low set last Friday.

Exact Sciences (EXAS) and Nektar Therapeutics (NKTR) turned in two of the biotech sector's best performances, surging up by 9.8 percent and 9.1 percent, respectively.

Significant strength was also visible among software stocks, as reflected by the 2.6 percent gain posted by the Dow Jones Software Index. The index reached a thirteen-year intraday high before giving back some ground.

Microsoft (MSFT) helped lead the software sector higher, jumping 3.9 percent on reports that the company will introduce a version of its Office software suite for the iPad later this month.

Computer hardware stocks also showed a strong move to the upside on the day, resulting in a 2 percent gain by the NYSE Arca Computer Hardware Index. Hewlett-Packard (HPQ) and Lexmark (LXK) posted standout gains.

Semiconductor, housing, and healthcare stocks also moved notably higher, 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 moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index climbed by 1 percent, the German DAX Index and the U.K.'s FTSE 100 Index rose by 0.7 percent and 0.6 percent, respectively.

In the bond market, treasuries moved modestly higher, partly offsetting the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.8 basis points to 2.681 percent.

Looking Ahead

Trading activity on Wednesday may be somewhat subdued in the lead-up to the Fed announcement, with no major U.S. economic reports scheduled to be released.

Nonetheless, Oracle (ORCL), Adobe Systems (ADBE), and Pacific Sunwear (PSUN) could be in focus after reporting their quarterly results after the close of today's trading.

FedEx (FDX), General Mills (GIS), and KB Home (KBH) are also among the companies scheduled to release their quarterly results before the start of trading on Wednesday.