WASHINGTON (dpa-AFX) - After moving notably higher early in the session, stocks have seen further upside over the course of the trading day on Tuesday. The major averages have all shown significant upward moves, with the tech-heavy Nasdaq leading the charge.
Currently, the major averages are just off their highs of the session. The Nasdaq is up 371.01 points or 2.2 percent at 17,151.62, the S&P 500 is up 75.55 points or 1.4 percent at 5,419.94 and the Dow is up 306.35 points or 0.8 percent at 39,663.36.
The rally on Wall Street comes following the release of a Labor Department report showing producer prices crept slightly higher in the month of July.
The Labor Department said its producer price index for final demand inched up by 0.1 percent in July after rising by 0.2 percent in June. The uptick by producer prices matched economist estimates.
Meanwhile, the report said the annual rate of producer price growth slowed to 2.2 percent in July from an upwardly revised 2.7 percent in June.
Economists had expected the annual rate of producer price growth to decelerate to 2.3 percent from the 2.6 percent originally reported for the previous month.
The notable slowdown by the annual rate of price growth has increased confidence the Federal Reserve will lower interest rates at its monetary policy meeting next month.
CME Group's FedWatch Tool is currently indicating a 54.5 percent chance the Fed will cut rates by 50 basis points and a 45.5 percent chance of a 25 basis point rate cut.
'The PPI data this morning came in lower than expected - across the board - which is good news for those investors that worried the Fed would have to be more cautious in lowering interest rates due to lingering inflation,' said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance.
He added, 'If tomorrow's CPI report comes in lower than expected, like this morning's PPI report did, then the Fed truly has a green light to cut rates by 50 bps at their next meeting if they deem it necessary to quickly get back to neutral in the face of a looming slowdown in the economy.'
On Wednesday, the Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of July.
Economists currently expect consumer prices to rise by 0.2 percent in July after edging down by 0.1 percent in June, while the annual rate of consumer price growth is expected to dip to 2.9 percent from 3.0 percent.
Core consumer prices, which exclude food and energy prices, are also expected to rise by 0.2 percent in July after inching up by 0.1 percent in June. The annual rate of core price growth is expected to slow to 3.2 percent from 3.3 percent.
Sector News
Semiconductor stocks are turning in some of the market's best performances on the day, resulting in a 3.7 percent spike by the Philadelphia Semiconductor Index.
Substantial strength also remains visible among computer hardware stocks, driving the NYSE Arca Computer Hardware Index up by 3.1percent.
Gold stocks are also seeing considerable strength amid a modest increase by the price of the precious metal, with the NYSE Arca Gold Bugs Index climbing by 1.6 percent.
Software, housing and pharmaceutical stocks have also moved notably higher on the day, while energy stocks are bucking the uptrend amid a sharp pullback by the price of crude oil.
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 3.5 percent, while China's Shanghai Composite Index rose by 0.3 percent.
The major European markets also moved to the upside over the course of the session. While the German DAX Index advanced by 0.5 percent, the French CAC 40 Index climbed by 0.4 percent and the U.K.'s FTSE 100 Index increased by 0.3 percent.
In the bond market, treasuries are extending a recent move to the upside following the producer price inflation data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.5 basis points at 3.854 percent.
Copyright(c) 2024 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2024 AFX News
