Wall Street Gains Modest Strength On Investor’s Bargain Hunting

After recovering from an early move to the downside, stocks moved modestly higher over the course of the trading session on Tuesday. The major averages climbed well off their early lows and into positive territory.

The major averages all finished the day in the green, although the tech-heavy Nasdaq was little changed, inching up 1.08 points or 0.1 percent to 10,547.11. The Dow rose 92.20 points or 0.3 percent to 32,849.74 and the S&P 500 crept up 3.96 points or 0.1 percent to 3,821.62.

The modest strength on Wall Street came as some traders looked to pick up stocks at relatively reduced levels following recent weakness.

The major averages closed lower for four consecutive session, ending Monday’s trading at their lowest closing levels in over a month.

Buying interest remained somewhat subdued, however, with some traders reluctant to get back into the markets amid lingering concerns the Federal Reserve’s aggressive interest rate hikes will tip the economy into a recession, RTT News cited.

On Friday, the Commerce Department is due to release its report on personal income and spending, which includes a reading on inflation said to be preferred by the Fed.

With Fed Chair Jerome Powell saying the central bank will require “substantially more evidence” inflation is on a sustained downward trend before halting its rate hikes, traders are likely to keep a close eye on the inflation reading.

Reports on consumer confidence, new and existing home sales and durable goods orders are also likely to attract attention in the coming days.

In U.S. economic news, the Commerce Department released a report showing a decrease in new residential construction in the U.S. in the month of November.

The report said housing starts fell by 0.5 percent to an annual rate of 1.427 million in November after tumbling by 2.1 percent to a revised rate of 1.434 million in October.

Economists had expected housing starts to decline by 0.7 percent to a rate of 1.415 million from the 1.425 million originally reported for the previous month.

The Commerce Department also said building permits plunged by 11.2 percent to an annual rate of 1.342 million in November after slumping by 3.3 percent to a revised rate of 1.512 million in October.

Building permits, an indicator of future housing demand, were expected to dive by 3.7 percent to 1.470 million from the 1.526 million originally reported for the previous month.

Sector News

Gold stocks moved sharply higher on the day, resulting in a 4.6 percent spike by the NYSE Arca Gold Bugs Index.

The rally by gold stocks came amid a notable increase by the price of the precious metal, with gold for February delivery jumping $27.70 to $1,825.40 an ounce.

An increase by the price of crude oil also contributed to considerable strength among oil service stocks, driving the Philadelphia Oil Service Index up by 3.1

Substantial strength is also visible among steel stocks, as reflected by the 2.2 percent surge by the NYSE Arca Steel Index.

Oil producer, biotechnology and tobacco stocks also moved to the upside on the day, while transportation stocks saw notable weakness.

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