WASHINGTON (dpa-AFX) - Stocks have moved mostly higher during trading on Tuesday, with the major averages all moving to the upside after ending yesterday's choppy trading session moderately lower. With the upward move, the tech-heavy Nasdaq has reached a new record intraday high.
Currently, the major averages are just off their highs of the session. The Dow is up 478.79 points or 1.1 percent at 44,453.88, the Nasdaq is up 159.46 points or 0.8 percent at 21,544.87 and the S&P 500 is up 47.64 points or 0.8 percent at 6,421.09.
The strength on Wall Street comes following the release of the Labor Department's closely watched report on consumer price inflation in the month of July.
The Labor Department said its consumer price index rose by 0.2 percent in July after climbing by 0.3 percent in June. The modest increase matched expectations.
The annual rate of growth by consumer prices in July was unchanged from the previous month at 2.7 percent, while economists had expected the pace of growth to tick up to 2.8 percent.
The report also said the core consumer price index, which excludes food and energy prices, climbed by 0.3 percent in July after rising by 0.2 percent in June. The increase by core prices was also in line with estimates.
Meanwhile, the annual rate of growth by core consumer prices accelerated to 3.1 percent in July from 2.9 percent in June. Economists had expected the pace of growth to inch up to 3.0 percent.
Despite the faster than expected annual core price growth, traders seem to believe the data increases the chances the Federal Reserve will lower interest rates next month.
'Although the Fed supposedly focuses more on the core number than on the headline number (in order to strip out the noisier components of inflation), we don't believe that this report will deter the Fed from cutting rates next month,' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
Following the release of the report, CME Group's FedWatch Tool is indicating a 92.1 percent chance the Fed will cut rates by a quarter point in September.
Sector News
Airline stocks have shown a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 7.1 percent.
Significant strength is also visible among steel stocks, as reflected by the 2.5 percent jump by the NYSE Arca Steel Index.
Energy stocks are also seeing considerable strength despite a decrease by the price of crude oil, moving notably higher along with banking, semiconductor and computer hardware stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged by 2.2 percent, while China's Shanghai Composite Index climbed by 0.5 percent.
Meanwhile, the major European markets are turning in another mixed performance on the day. While the German DAX Index is down by 0.1 percent, the U.K.'s FTSE 100 Index is up by 0.1 percent and the French CAC 40 Index is up by 0.6 percent.
In the bond market, treasuries have moved back to the downside following yesterday's modest rebound. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.4 basis points at 4.297 percent.
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