Stocks Rally Amid Rebound In Commodities Prices - U.S. Commentary

(RTTNews) - On the heels of the lackluster performance seen in the previous session, stocks moved sharply higher during trading on Tuesday. The tech-heavy Nasdaq moved higher for the third straight day after hitting its lowest levels in nearly two months.

The major averages saw further upside going into the close, ending the session just off their best levels of the day. The Dow soared 222.44 points or 1.3 percent to 17,928.35, the Nasdaq jumped 59.67 points or 1.3 percent to 4,809.88 and the S&P 500 surged up 25.70 points or 1.3 percent to 2,084.39.

The buying interest on Wall Street was partly due to a notable rebound by most commodities prices, which fell sharply on Monday due in part to the release of disappointing Chinese trade data.

The price of crude oil for June delivery surged up $1.22 to $44.66 a barrel after slumping $1.22 to $43.44 a barrel in the previous session.

The rebound by the price of crude oil came amid supply disruptions due to a wildfire in Canada and unrest in Nigeria.

Commodities also benefited from tame Chinese inflation data, which generated some optimism about further monetary policy maneuvers.

Data released by the Chinese National Bureau of Statistics showed that annual consumer price inflation remained steady at 2.3 percent for the third straight month in April.

Meanwhile, Chinese producer prices fell 3.4 percent year-over-year in April after falling by 4.3 percent in March. Prices declined for the 50th straight month.

Traders also reacted positively to a decrease by the value of the Japanese yen, with the U.S. dollar trading at 109.29 yen compared to the 108.32 yen it fetched at the close of New York trading on Monday.

The decrease in the value of the safe haven yen may reflect easing concerns about the outlook for the global economy.

Among individual stocks, home soda machine maker SodaStream (SODA) moved sharply higher after reporting first quarter results that exceeded analyst estimates.

Shares of Allergan (AGN) also moved to the upside after the drug maker reported better than expected first quarter earnings and announced a $10 billion stock buyback.

On the other hand, SolarCity (SCTY) came under pressure after the solar company reported a wider than expected first quarter loss and lowered its guidance for solar panel installations. Sector News

After falling sharply in the previous session, gold stocks showed a strong move back to the upside on the day. The NYSE Arca Gold Bugs Index surged up by 4 percent, partly offsetting the 6.9 percent drop seen on Monday.

The rebound by gold stocks came even though the price of the precious metal saw further downside, with gold for June delivery dipping $1.80 to $1,264.80 an ounce.

Steel stocks also saw a substantial rebound, with the NYSE Arca Steel Index jumping by 3.8 percent after plunging by 7.8 percent in the previous session.

Considerable strength was also visible among brokerage stocks, as reflected by the 2.7 percent gain posted by the NYSE Arca Broker/Dealer Index. With the gain, the index rebounded after ending the previous session at its lowest closing level in a month.

Stifel Financial (SF) helped to lead the brokerage sector higher, jumping by 10.2 percent after reporting better than expected first quarter results.

Energy, internet, railroad, and electronic storage stocks also saw significant 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 surged up by 2.2 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index climbed by 0.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index both advanced by 0.7 percent.

In the bond market, treasuries showed a lack of direction throughout the session before closing flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day unchanged at 1.760 percent.

Looking Ahead

Reaction to the latest earnings news may attract attention on Wednesday, with Disney (DIS) and Electronic Arts (EA) among the companies releasing their quarterly results after the close of today's trading.

Macy's (M) and Wendy's (WEN) are also due to release their quarterly results before the start of trading on Wednesday.

Additionally, the Energy Information Administration is scheduled to release its weekly report on oil inventories, which could impact the price of crude oil.