Market Wrap for Tuesday, July 9: Major Averages Closing in on Previous Highs
On Tuesday, stocks continued to push towards year-to-date highs last seen in late May.
The S&P 500 breached the 1,650 level to the upside and the Dow closed around 300 points above the 15,000 level. After an early sell-off, the major averages rose throughout much of the afternoon and recorded their fourth straight day of gains.
Commodities and the U.S. Dollar also rose on the day, while long-term Treasury prices were largely unchanged. Alcoa (NYSE: AA) kicked off earnings season on Monday, and the coming weeks will be dominated by the release of quarterly results from hundreds of prominent companies.
The Dow Jones Industrial Average climbed around 76 points, or 0.50 percent, to close at 15,300.
The S&P 500 added 12 points, or 0.72 percent, to 1,652.
The Nasdaq rose 19 points, or 0.56 percent, to close at 3,504.
Crude oil continued its rally on Tuesday, with prices of WTI crude futures trading on NYMEX, the U.S. benchmark, holding firmly above $100. WTI crude oil climbed 0.58 percent to $103.74. Brent crude contracts added 0.30 percent to $107.75. Natural gas was last trading down more than 2 percent on the session to $3.66.
Precious metals followed stocks higher on Tuesday. At last check, COMEX gold futures were up 0.75 percent to $1,244.20. Silver contracts had added 0.64 percent to $19.16. Copper contracts fell on the session and were last down 1.15 percent to $3.0640.
In the grains complex, both corn and wheat rose sharply. The only product that was lower on the day was canola. Corn was last trading higher by 4.25 percent while wheat had climbed 2.19 percent.
In soft commodities, movers included lumber and orange juice concentrate, although volatility was limited overall. Rubber contracts fell around 2 percent while orange juice was up 1.22 percent at last check.
Long-term Treasury prices were essentially unchanged on the day. At last check, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) was up 0.01 percent to $107.30. Treasuries have been trying to find a bottom since beginning a sharp fall at the beginning of May.
Treasury yields were as follows late on Tuesday: The 2-Year Note was yielding 0.36 percent while the 5-Year Note yield was sitting at 1.49 percent after rising forty basis points over the last month alone. The 10-Year Note yield was 2.63 percent and the 30-Year Bond was yielding 3.65 percent.
The U.S. Dollar rose on Tuesday. Near the close of equities, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was up 0.44 percent to $22.94.
The closely watched EUR/USD pair was last trading at $1.2787, a loss of 0.68 percent on the day. Other movers on the session included the GBP/USD, which fell 0.54 percent and the AUD/USD, which rose 0.54 percent.
Volatility and Volume
The VIX continued to fall on Tuesday as investors are becoming more comfortable with the current market environment. The widely watched barometer of volatility expectations fell around 3 percent to 14.32.
Volume was lighter than normal on the session as trading activity has died down in recent weeks. Around 101 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands on the session compared to a 3-month daily average of 144 million.
Shares of Prestige Brands (NYSE: PBH) were up better than 10 percent on Tuesday after the company announced the acquisition of Australian company Care Pharmaceuticals.
Tesaro (NASDAQ: TSRO) jumped better than 8 percent on the session. The biotech firm presented at the 8th Annual JMP Securities 2013 Healthcare Conference in New York on Tuesday.
Freescale Semiconductor (NYSE: FSL) rose almost 9 percent on Tuesday after the stock was upgraded to Overweight at Piper Jaffray.
Shares of Epizyme (NASDAQ: EPZM) rose almost 7 percent on Tuesday amid widespread strength in the biotech sector. The company was also added to the Russell 2000 at the beginning of the month.
Health Management Associates (NYSE: HMA) jumped more than 8 percent in intra-day trading after reports came out that the company is a takeover target. Community Health (NYSE: CYH) is among the the reported prospective suitors and that stock jumped better than 4 percent.
YRC Worldwide (NASDAQ: YRCW) climbed almost 14 percent on Tuesday. A bullish Seeking Alpha article may have helped catalyze the move in the name.
Ixia (NASDAQ: XXIA) plunged more than 20 percent on Tuesday after the company cut its Q2 revenue outlook. Among the firms that downgraded the shares in the wake of the news were Stifel Nicolaus and Deutsche Bank.
Intuitive Surgical (NASDAQ: ISRG) lost around 16 percent on the day after providing a disappointing Q2 sales forecast. A number of Wall Street brokers also downgraded the stock, including Raymond James.
Synchronoss Technologies (NASDAQ: SNCR) fell almost 12 percent after the stock was downgraded to Sell at Goldman Sachs.
Allegiant Travel (NASDAQ: ALGT) fell around 7 percent after the company released preliminary passenger traffic results for June 2013. "Revenue was weaker than expected," said Andrew Levy, the company's president.
NGL Energy Partners (NYSE: NGL) fell more than 7 percent after announcing a secondary offering of common units.
PharMerica (NYSE: PMC) lost around 7.50 percent on the session after the stock was downgraded to Underweight at Barclays. The firm said that the company's fiscal 2014 earnings are at risk after the loss of the PharMerica's two largest customers.
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