WASHINGTON (dpa-AFX) - After ending the previous session mostly higher, stocks turned in a mixed performance during trading on Tuesday. The S&P 500 reached its best closing level in five months, while the tech-heavy Nasdaq gave back ground after spiking to a record closing high on Monday.
The major averages finished the day on opposite sides of the unchanged line. While the Nasdaq slid 86.73 points or 0.8 percent to 10,680.36, the Dow climbed 159.53 points or 0.6 percent to 26,840.40 and the S&P 500 rose 5.46 points or 0.2 percent to 3,257.30.
The advance by the Dow was partly due to strong gains by energy giants Chevron (CVX) and Exxon Mobil (XOM), which surged up by 7.1 percent and 5.1 percent, respectively.
The gains reflected strength throughout the energy sector, as the price of crude oil for August delivery spiked $1.15 to a four-month high of $41.96 a barrel.
Dow component Coca-Cola (KO) also posted a notable gain after the beverage giant reported better than expected second quarter results.
Meanwhile, shares of IBM (IBM) edged lower even though tech giant reported second quarter results that exceeded analyst estimates on both the top and bottom lines.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 6.9 percent, the NYSE Arca Oil Index jumped by 5.9 percent and the NYSE Arca Natural Gas Index shot up by 4.7 percent.
Banking stocks also showed a substantial move to the upside on the day, driving the KBW Bank Index up by 3.9 percent. Tobacco, airline and brokerage stocks also saw considerable strength.
On the other hand, biotechnology stocks fell sharply, contributing to the pullback by the Nasdaq. The NYSE Arca Biotechnology Index plunged by 2.6 percent after ending the previous session at a record closing high.
Notable weakness was also visible among software stocks, as reflected by the 1.3 percent drop by the Dow Jones U.S. Software Index.
Traders were also reacting to news that European Union leaders agreed on a package of measures to tackle the exceptional nature of the economic and social situation posed by the coronavirus pandemic.
After four days of talks in Brussels, EU leaders agreed to the package worth 750 billion euros. Accordingly, the bloc will jointly issue debt that will be provided to member nations hit hardest by Covid-19.
Out of the 750 billion euro recovery plan, 390 billion euros will be in the form of grants and 360 billion euros of low interest rate loans. Now, the deal needs to be approved by the parliaments of the 27 member states.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index surged up by 2.3 percent.
The major European markets also moved to the upside on the day. While the German DAX Index jumped by 1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index edged up by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries pulled back off their best levels of the day but still closed modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.3 basis points to 0.607 percent.
Looking Ahead
After two quiet days on the economic front, trading on Wednesday may be impacted by reaction to a report on existing home sales in June.
Earnings news will also continue to attract attention, with Capital One (COF), Snap (SNAP), TD Ameritrade (AMTD), Texas Instruments (TXN) and United Airlines (UAL) among the companies releasing their quarterly results after the close of today's trading.
Biogen (BIIB), Check Point Software (CHKP) HCA Healthcare (HCA) and KeyCorp (KEY) are also among the companies due to report their results before the start of trading on Wednesday.
Copyright RTT News/dpa-AFX