WASHINGTON (dpa-AFX) - After moving sharply lower at the open, stocks have fluctuated over the course of the trading session on Tuesday but largely maintained a positive bias. The major averages are extending the substantial rebound seen over the two course of the previous session.
The major averages have moved to the upside in recent trading but currently remain below their early highs. The Dow is up 658.14 points or 2.6 percent at 26,421.30, the Nasdaq is up 198.28 points or 2 percent at 9,924.30 and the S&P 500 is up 70.29 points or 2.3 percent at 3,136.88.
The continued strength on Wall Street comes following the release of a report from the Commerce Department showing retail sales rebounded by much more than anticipated in the month of May as stores began to reopen following the coronavirus lockdown.
The Commerce Department said retail sales skyrocketed by 17.7 percent in May after plunging by a revised 14.7 percent in April.
Economists had expected retail sales to spike by 8.0 percent compared to the 16.4 percent nosedive originally reported for the previous month.
The record increase in retail sales was partly due to a substantial rebound in sales by motor vehicle and parts dealers, which soared by 44.1 percent in May after tumbling by 12.3 percent in April.
Excluding the rebound in auto sales, however, retail sales still surged up by 12.4 percent in May after plummeting by 15.2 percent in April. Ex-auto sales were expected to jump by 5.5 percent.
Sales by clothing and accessories stores showed a particularly sharp increase, catapulting by 188.0 percent in May following a 63.4 percent nosedive in the previous month.
Core retail sales, which exclude automobiles, gasoline, building materials and food services, also surged up by 11.0 percent in May after plunging by 12.4 percent in April.
On the heels of the much better than expected jobs report released earlier this month, the data has reinforced optimism about a quick economic recovery.
Positive sentiment was also generated in reaction to report from Bloomberg indicating the Trump administration is preparing a nearly $1 trillion infrastructure proposal as part of an effort to support the economy following the coronavirus pandemic.
People familiar with the plan told Bloomberg a preliminary version would reserve most of the money for traditional infrastructure work, like roads and bridges, but would also set aside funds for 5G wireless infrastructure and rural broadband.
Bloomberg noted President Donald Trump is scheduled to discuss rural broadband access at a White House event on Thursday.
The people familiar with the plan told Bloomberg the administration sees an existing infrastructure funding law that is up for renewal by September 30 as a possible vehicle for the broader package.
Meanwhile, traders have largely shrugged off a report from the Federal Reserve showing U.S. industrial production increased by much less than expected in the month of May.
The Fed said industrial production jumped by 1.4 percent in May after plummeting by a downwardly revised 12.5 percent in April.
Economists had expected industrial production to surge up by 2.9 percent compared to the 11.2 percent plunge originally reported for the previous month.
During congressional testimony, Fed Chair Jerome Powell acknowledged recent signs of improvement in the economy but cautioned that 'significant uncertainty remains about the timing and strength of the recovery.'
Sector News
Steel stocks have moved sharply higher amid the news about the Trump administration's infrastructure plan, with the NYSE Arca Steel Index spiking by 4.3 percent.
Indications the plan will include spending on 5G wireless infrastructure and rural broadband has also contributed to substantial strength among networking stocks, as reflected by the 4.2 percent jump by the NYSE Arca Networking Index.
Energy stocks also continue to turn in a strong performance even though the price of crude oil has pulled back well off its earlier highs. After reaching a high of $39.06 a barrel, crude for July delivery is currently up $0.41 at $37.53 a barrel.
Housing stocks are also seeing considerable strength following the release of a report showing a bigger than expected improvement in homebuilder confidence in the month of June.
Computer hardware, pharmaceutical, and financial stocks are also holding on to strong gains, while gold stocks continue to buck the uptrend despite an increase by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved significantly higher during trading on Tuesday. Japan's Nikkei 225 Index soared by 4.9 percent, while Hong Kong's Hang Seng Index jumped by 2.4 percent.
The major European markets also showed substantial moves to the upside on the day. While the German DAX Index spiked by 3.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index surged up by 2.9 percent and 2.8 percent, respectively.
In the bond market, treasuries have moved notably lower after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.4 basis points at 0.756 percent.
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