U.S. Stocks Close Notably Higher For Third Straight Session

(RTTNews) - Stocks showed a lack of direction throughout much of the trading session on Tuesday but managed to end the day mostly higher. With the upward move, the major averages added to the strong gains posted in the two previous sessions.

The major averages moved to the upside going into the close, ending the session near their best levels of the day. The Dow advanced 273.38 points or 0.8 percent to 35,405.24, the Nasdaq climbed 106.12 points or 0.8 percent to 14,346.00 and the S&P 500 rose 30.99 points or 0.7 percent at 4,546.54.

The strength that emerged on Wall Street came as traders continue to pick up stocks at relatively reduced levels following a disappointing January.

Despite the strong upward move seen over the last two sessions of January, the major averages posted steep losses for the first month of the year. The Nasdaq and the S&P 500 plunged by 8.9 percent and 5.2 percent, respectively, recording their worst months since March of 2020.

A positive reaction to the latest earnings news also contributed to the continued advance, with shares of UPS (UPS) soaring after the delivery giant reported better than expected fourth quarter results, provided upbeat guidance and raised its dividend.

Energy giant ExxonMobil (XOM) also showed a strong move to the upside after reporting fourth quarter earnings that beat analyst estimates and announcing a new $10 billion share repurchase program.

In U.S. economic news, the Institute for Supply Management released a report showing growth in U.S. manufacturing activity continued to slow in the month of January.

The ISM said its manufacturing PMI fell to 57.6 in January from a revised 58.8 in December, although a reading above 50 still indicates growth in the sector. The index decreased for the third straight month, slipping to its lowest level in over a year.

Economists had expected the manufacturing PMI to drop to 57.5 from the 58.7 originally reported for the previous month.

Sector News

Steel stocks moved sharply higher over the course of the session, resulting in a 4.7 percent spike by the NYSE Arca Steel Index.

Significant strength also emerged among energy stocks, which soared even as by the price of crude oil ended the day only modestly higher.

While crude for March delivery inch up $0.05 to $88.20 a barrel, the Philadelphia Oil Service Index shot up by 4.2 percent and the NYSE Arca Oil Index jumped by 3 percent.

Banking stocks also turned in a strong performance on the day, with the KBW Bank Index surging by 2.4 percent.

Transportation, brokerage and biotechnology stocks also moved notably higher, while interest rate-sensitive utilities stocks bucked the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved higher on Tuesday, although several major markets were closed for Chinese New Year. Japan's Nikkei 225 Index rose by 0.3 percent, while Australia's S&P/ASX 200 Index climbed by 0.5 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 surged up by 1.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index both jumped by 1 percent.

In the bond market, treasuries showed a lack of direction over the course of the session before closing modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.8 basis points to 1.800 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to ADP's report on private sector employment, which may provide clues about the Labor Department's more closely watched monthly jobs report.

Reaction to the latest earnings news may also drive trading, with Google parent Alphabet (GOOGL), Advance Micro Devices (AMD), General Motors (GM) and Starbucks (SBUC) among the companies releasing their quarterly results after the close of today's trading.