Stocks Finish Volatile Session Firmly In Positive Territory - U.S. Commentary

(RTTNews) - After ending the previous session roughly flat, stocks fluctuated throughout the trading day on Tuesday. The major averages showed big swings as the day progressed but managed to end the session firmly in positive territory.

The major averages moved to the upside going into the close but remained below their best levels of the day. The Dow climbed 117.65 points or 0.7 percent to 16,516.22, the Nasdaq jumped 47.93 points or 1 percent to 4,685.92 and the S&P 500 advanced 15.01 points or 0.8 percent to 1,938.68.

The volatility on the day came as traders continued to keep an eye on developments in China, where authorities made an effort to stabilize the yuan following recent weakness.

China's Shanghai Composite Index subsequently edged up by 0.2 percent on the day despite declines by many of the other major Asian markets.

Traders were also keeping a close eye on the price of crude oil, which turned lower on the day but closed well off its worst levels.

After falling as low as $29.93 a barrel, crude oil for February delivery regained some ground but still ended the day down $0.97 at a twelve-year closing low of $30.44 a barrel.

Among individual stocks, shares of Apollo Education Group (APOL) moved sharply higher amid reports Apollo Global Management (APO) is in talks to acquire the for-profit education company.

Yoga wear maker Lululemon (LULU) also posted a strong gain after raising its fourth quarter guidance on stronger than expected holiday sales.

On the other hand, shares of Alcoa (AA) came under pressure after the aluminum giant kicked off the earnings season after the close of yesterday's trading.

Alcoa reported fourth quarter earnings that exceeded expectations, although its revenues came in slightly shy of estimates. The company also forecast record aluminum demand for the current year.

JP Morgan (JPM), Intel (INTC), Citigroup (C), and Wells Fargo (WFC) are due to report their quarterly results later in the week.

Sector News

Computer hardware stocks saw considerable strength throughout the session, resulting in a 4.1 percent jump by the NYSE Arca Computer Hardware. With the gain, the index bounced off its lowest closing level in over two years.

Super Micro Computer (SMCI) helped to lead the hardware sector higher after forecasting fiscal second quarter results above analyst estimates.

Significant strength was also visible among trucking stocks, as reflected by the 1.3 percent gain posted by the Dow Jones Trucking Index. The index ended the previous session at its lowest closing level in well over a year.

Biotechnology, railroad, healthcare, and software stocks also ended the day on the upside, contributing to the higher close by the broader markets.

On the other hand, natural gas stocks moved sharply lower on the day, dragging the NYSE Arca Natural Gas Index down by 2.6 percent. Ultra Petroleum (UPL), Williams (WMB), and Southwestern Energy (SWN) posted steep losses.

Gold stocks also saw notable weakness amid a decrease by the price of the precious metal. With gold for February delivery sliding $11 to $1,085.20 an ounce, the NYSE Arca Gold Bugs Index dropped by 2.4 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 2.7 percent, while Hong Kong's Hang Seng Index dropped by 0.9 percent.

Meanwhile, the major European markets showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 1 percent, the French CAC 40 Index and the German DAX Index jumped by 1.5 percent and 1.6 percent, respectively.

In the bond market, treasuries turned higher over the course of the session after seeing initial weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid by 5.6 basis points to a two-month closing low of 2.102 percent.

Looking Ahead

In light of the recent focus on oil prices, trading on Wednesday may be impacted by the Energy Information Administration's weekly report on oil inventories.

The Federal Reserve is also scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.