Stocks Manage To End Lackluster Session Modestly Higher - U.S. Commentary

(RTTNews) - Stocks turned in a relatively lackluster performance during trading on Tuesday but managed to end the session modestly higher. The major averages closed higher for the fourth consecutive session, largely offsetting the sell-off seen last Wednesday.

The major averages finished the day in positive territory but off their highs of the session. The Dow rose 43.08 points or 0.2 percent to 20,937.91, the Nasdaq inched up 5.09 points or 0.1 percent to 6,138.71 and the S&P 500 edged up 4.40 points or 0.2 percent at 2,398.42.

The higher close on Wall Street came as stocks continued to benefit from the upward momentum seen in recent days, which has helped lift the major averages well off their lowest levels in nearly a month.

Many traders felt the pullback last Wednesday was overdone amid lingering optimism about President Donald Trump's ability to implement his pro-business policy agenda.

Nonetheless, traders seemed somewhat reluctant to make more significant moves ahead of tomorrow's release of the minutes of the latest Federal Reserve meeting.

The minutes of the meeting held earlier this month may shed some additional light on the outlook for interest rates ahead of the next meeting in mid-June.

The Fed is widely expected to raise interest rates next month, with CME Group's FedWatch tool indicating an 83.1 percent chance of a quarter point rate hike.

Meanwhile, traders largely shrugged off a report from the Commerce Department showing a substantial pullback in new home sales in the month of April.

The Commerce Department said new home sales plunged by 11.4 percent to an annual rate of 569,000 in April from an upwardly revised 642,000 in March.

Economists had expected new home sales to drop to a rate of 602,000 from the 621,000 originally reported for the previous month.

The upwardly revised figure for March reflected the highest rate of new home sales since it reached 727,000 in October of 2007.

Sector News

Many of the major sectors ended the day showing only modest moves, although substantial strength was visible among steel stocks. Reflecting the strength in the steel sector, the NYSE Arca Steel Index surged up by 2.1 percent.

AK Steel (AKS), Mechel (MTL), Gerdau (GGB), and U.S. Steel (X) turned in some of the steel sector's best performances.

Banking stocks also showed a strong move to the upside on the day, driving the Dow Jones Banks Index up by 1.2 percent. Regions Financial (RF), Zions Bancorp (ZION), and Cullen/Frost (CFR) posted notable gains.

On the other hand, gold stocks moved sharply lower, resulting in a 3 percent drop by the NYSE Arca Gold Bugs Index. The weakness in the sector came as gold for June delivery fell $5.90 to $1,255.50 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.3 percent, while China's Shanghai Composite Index dropped by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index dipped by 0.2 percent, the German DAX Index rose by 0.3 percent and the French CAC 40 Index climbed by 0.5 percent.

In the bond market, treasuries came under pressure over the course of the trading session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 3.1 basis points to 2.285 percent.

Looking Ahead

A report on existing home sales may attract some attention on Wednesday, although trading activity may be subdued ahead of the release of the Fed minutes later in the day.

On the earnings front, Lowe's (LOW) and Tiffany (TIF) are among the companies due to release their quarterly results before the start of trading on Wednesday.