Stocks Close Notably Higher Amid Rebound By Oil Prices - U.S. Commentary

(RTTNews) - With stocks continuing to follow in the footsteps of the price of crude oil, significant strength was visible on Wall Street on Tuesday. The gains on the day partly offset the sharp pullback that was seen over the course of the previous session.

The major averages ended the session firmly in positive territory. The Dow jumped 282.01 points or 1.8 percent to 16,167.23, the Nasdaq advanced 49.18 points or 1.1 percent to 4,567.67 and the S&P 500 surged up 26.55 points or 1.4 percent to 1,903.63.

The strength on Wall Street was partly due to a significant rebound by the price of crude oil, with crude for March delivery jumping $1.11 to $31.34 a barrel.

The price of crude oil fell as low as $29.25 a barrel earlier in the day after tumbling $1.85 to $30.34 a barrel in the previous session.

Buying interest was also generated in reaction to the release of quarterly results from several big-name companies as earnings season picks up steam.

Wireless carrier Sprint (S) posted a standout gain on the day after reporting a narrower than expected third quarter loss on cost cutting and subscriber growth.

Shares of Dow components 3M (MMM), Procter & Gamble (PG) and Johnson & Johnson (JNJ) also moved notably higher after the companies reported better than expected quarterly earnings.

Tech giant Apple (AAPL) is among the companies releasing their quarterly results after the close of trading along with AT&T (T), Capital One (COF), and U.S. Steel (X).

Traders may also have reacted positively to some upbeat U.S. economic data, including a report from the Conference Board showing an unexpected improvement in consumer confidence.

The Conference Board said its consumer confidence index climbed to 98.1 in January from a downwardly revised 96.3 in December. Economists had expected the index to edge down to 96.0.

"For now, consumers do not foresee the volatility in financial markets as having a negative impact on the economy," said Lynn Franco, Director of Economic Indicators at the Conference Board.

A separate report from the Standard & Poor's showed a notable acceleration in the annual rate of home price growth in the month of November.

Sector News

Most of the major sectors showed strong moves to the upside on the day, reflecting broad based buying interest on Wall Street.

Energy stocks showed a substantial rebound along with the price of crude oil after helping to lead the markets lower in the previous session.

After plummeting by 8 percent on Monday, the NYSE Arca Natural Gas Index surged up by 6.8 percent. The NYSE Arca Oil & Gas Index also jumped by 3.8 percent, while Philadelphia Oil Service Index shot up by 2.9 percent.

Considerable strength was also visible among gold stocks, as reflected by the 5.8 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the sector came as gold for February delivery climbed $14.90 to $1,120.20 an ounce.

Steel stocks also saw significant strength on the day, driving the NYSE Arca Steel Index up by 5.5 percent. The gain by the index came after it ended the previous session at a record closing low.

Telecom, trucking, computer hardware, and housing stocks also turned in strong performances, while biotechnology stocks were among the few groups to buck the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index plummeted by 2.4 percent and 2.5 percent, respectively.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.6 percent, the German DAX Index and the French CAC 40 Index advanced by 1 percent and 1.1 percent, respectively.

In the bond market, treasuries moved moderately higher despite the strength on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.8 basis points to 1.994 percent.

Looking Ahead

Traders are likely to keep an eye on the Federal Reserve on Wednesday, as the central bank is due to announce its latest monetary policy decision.

The Fed is widely expected to leave interest rates unchanged, but traders are likely to pay close attention to the wording of the accompanying statement.

Ahead of the Fed announcement tomorrow afternoon, trading could be impacted by the release of a report on new home sales in the month of December.

Reaction to Apple's earnings may also drive trading, while Boeing (BA), Ericsson (ERIC), General Dynamics (GD), and United Technologies (UTX) are due to report their results before the start of trading.