Stocks Close Mostly Higher But Off Best Levels Of The Day - U.S. Commentary

(RTTNews) - After showing a strong move to the upside at the open, stocks continued to perform relatively well throughout the trading session on Tuesday. The gains on the day partly offset the weakness seen over the past few sessions.

The major averages ended the day firmly in positive territory but off their highs for the session. The Dow rose 75.54 points or 0.4 percent to 18,161.94, the Nasdaq advanced 44.01 points or 0.9 percent to 5,243.84 and the S&P 500 climbed 13.10 points or 0.6 percent to 2,139.60.

The strength on Wall Street came as traders picked up stocks at reduced levels after the major averages ended Monday's trading at their lowest closing levels in a month.

A positive reaction to some of the latest batch of corporate results also generated buying interest as the earnings season continues to pick up steam.

Shares of Netflix (NFLX) moved sharply higher on the day after the video streaming service reported better than expected third quarter results amid strong subscriber growth. Netflix also provided upbeat guidance.

Health insurer UnitedHealth (UNH) also posted a standout gain after reporting better than expected third quarter earnings and revenues and raising its full-year guidance.

Meanwhile, shares of IBM (IBM) and Johnson & Johnson (JNJ) moved to the downside even though the companies reported third quarter results that exceeded analyst estimates.

On the U.S. economic front, the Labor Department released a report before the start of trading showing that consumer prices rose in line with economist estimates in the month of September.

The Labor Department said its consumer price index climbed by 0.3 percent in September after edging up by 0.2 percent in August.

Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in September after increasing by 0.3 percent in August. Economists had expected core prices to rise by 0.2 percent.

The annual rate of consumer price inflation accelerated to 1.5 percent in September from 1.1 percent, while the core rate slowed to 2.2 percent from 2.3 percent.

A separate report from the National Association of Home Builders showed a pullback in homebuilder confidence in the month of October.

The report said the NAHB/Wells Fargo Housing Market Index dipped to 63 in October after jumping to an eleven-month high of 65 in September. The drop by the index matched economist estimates.

Sector News

Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 4.1 percent. The index continued to recover from the nearly six-month closing low set a week ago.

The strength among gold stocks came amid an increase by the price of the precious metal, with gold for December delivery climbing $6.30 to $1,262.90 an ounce.

Significant strength was also visible among internet stocks, with Netflix leading the way higher. Reflecting the strength in the sector, the Dow Jones Internet Index surged up by 1.8 percent.

Steel, airline, semiconductor, and chemical stocks also saw considerable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index surged up by 1.6 percent.

The major European markets also showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.8 percent, the German DAX Index and the French CAC 40 Index jumped by 1.2 percent and 1.3 percent, respectively.

In the bond market, treasuries closed modestly higher after initially showing a lack of direction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.7 basis points to 1.749 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to the Commerce Department's report on housing starts along with the Federal Reserve's Beige Book, which could shed some additional light on the outlook for interest rates.

Earnings news is also likely to be in focus, as a number of big-name companies are scheduled to release their quarterly results.

Intel (INTC) and Yahoo! (YHOO) are releasing their results after the close of today's trading, while Halliburton (HAL) and Morgan (MS) are among the companies due to report before the markets open on Wednesday.