Stocks See Further Upside After Early Rally - US Commentary

WASHINGTON (Alliance News) - After moving sharply higher early in the session, stocks have seen ...

Alliance News 12 February, 2019 | 5:13PM
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WASHINGTON (Alliance News) - After moving sharply higher early in the session, stocks have seen some further upside over the course of the trading day on Tuesday. With the upward move, the S&P 500 has reached its best intraday level in over two months.

In recent trading, the major averages reached new highs for the session. The Dow is up 334.49 points or 1.3% at 25,387.60, the Nasdaq is up 98.50 points or 1.4% at 7,406.41 and the S&P 500 is up 33.62 points or 1.2% at 2,743.42.

The rally on Wall Street comes amid optimism lawmakers will manage to avoid another government shutdown after negotiators reached a tentative agreement on border security.

Senate Appropriations Committee Chairman Richard Shelby, R-Ala., a lead Republican negotiator, said the two sides have reached an "agreement in principle."

The agreement reportedly includes USD1.4 billion for physical barriers on the border, well short of the USD5.7 billion President Donald Trump has demanded for construction or a border wall.

Democrats have also purportedly agreed to drop their demand to reduce the number of illegal immigrants who can be detained by Immigration and Customs Enforcement.

Shelby said the White House has been consulted throughout the negotiations, although it remains to be seen if Trump will sign off on the deal.

Trump continued to tout the success of walls during a rally in the border town of El Paso, Texas, on Monday, claiming sections of the wall are already being built or refurbished despite the dispute with Democrats.

The news comes as lawmakers face a deadline of midnight on Friday to pass a spending bill and avoid another government shutdown.

The markets also continue to benefit from optimism about the next round of US-China trade talks taking place this week.

A report from Bloomberg said some US officials see the most likely scenario at this week's talks is for Trump to defer his deadline for raising tariffs.

Sector News

Tobacco stocks have moved sharply higher over the course of the trading session, resulting in a 4.1% spike by the NYSE Arca Tobacco Index. The index has reached its best intraday level in nearly three months.

Significant strength also remains visible among housing stocks, as reflected by the 2.3% jump by the Philadelphia Housing Sector Index. With the increase, the index has reached a four-month intraday high.

Financial stocks have also moved notably higher on the day, with the NYSE Arca Broker/Dealer Index and the KBW Banks Index climbing by 2.1% and 1.7%, respectively.

Computer hardware, chemical, semiconductor and retail stocks are also seeing considerable strength, while gold stocks are among the few groups bucking the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index soared by 2.6%, while China's Shanghai Composite Index climbed by 0.7%.

European stocks also moved mostly higher on the day. While the UK's FTSE 100 Index inched up by 0.1%, the French CAC 40 Index advanced by 0.8% and the German DAX Index jumped by 1%.

In the bond market, treasuries are extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 2.690%.

Copyright RTT News/dpa-AFX

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