U.S. Stocks Give Back Ground After Spiking At The Start Of Trading

After moving sharply higher at the start of trading on Tuesday, stocks have given back some ground over the course of the morning. The major averages have pulled back well off their highs of the session but remain in positive territory.

Currently, the major averages are holding on to notable gains. The Dow is up 385.72 points or 1.7 percent at 23,065.71, the Nasdaq is up 49.82 points or 0.6 percent at 7,963.05 and the S&P 500 is up 35.59 points or 1.3 percent at 2,699.27.

The initial strength on Wall Street came amid recent signs that the spread of the coronavirus is slowing in hot spots such as New York, the epicenter of the global pandemic.

New York Governor Andrew Cuomo said Monday that the number of new coronavirus deaths in the state has been “effectively flat” over the past two days.

With death and hospitalization rates starting to stabilize, Cuomo said New York is seeing a “possible flattening of the curve” but cautioned that people need to continue to adhere to social distancing guidelines to prevent a reversal of the trend.

President Donald Trump also expressed optimism during the daily White House coronavirus briefing on Monday, saying, “There’s tremendous light at the end of the tunnel.”

Trump noted ten potential coronavirus treatments are currently in active trials, with some “looking incredibly successful.”

Expectations of more central bank and government stimulus to counter the economic fallout from the pandemic also generated some early buying interest.

After declaring a month-long state of emergency for Tokyo and six other prefectures, the Japanese government is expected to approve a coronavirus stimulus package totaling 108 trillion yen, or equal to 20 percent of Japan’s GDP.

Singapore also announced an additional stimulus package worth $3.6 billion in an effort to save jobs and protect the livelihoods of people amid the spread of coronavirus.

Buying interest has waned since the open, however, with some traders possibly seeing the upward move as overdone following the rally on Monday.

Despite the pullback by the broader markets, substantial strength remains visible among housing stocks. Reflecting the strength in the sector, the Philadelphia Housing Sector Index is jumping by 5.6 percent.

Chemical stocks also continue to see considerable strength on the day, with the S&P Chemical Sector Index surging up by 5.1 percent.

An increase by the price of crude oil is also contributing to significant strength among energy stocks, which are moving higher along with banking, commercial real estate and steel stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 2 percent, while China’s Shanghai Composite Index shot up by 2.1 percent.

The major European markets are also showing another substantial move to the upside on the day. While the German DAX Index is up by 2.2 percent, the U.K.’s FTSE 100 Index is up by 2 and the French CAC 40 Index is up by 1.6 percent.

In the bond market, treasuries are extending the notable drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 8.7 basis points at 0.763 percent.

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