Buybacks Pump Up Stock Rally


The Nasdaq closed in positive territory for the first time this year, and its rebound, combined with the broader market milestones, is an encouraging sign to analysts who had anxious about the durability of the market's gains built on relatively safe trades. The rally was in part driven by investors buying high-dividend and defensive shares, seeking refuge from low or negative interest rates in Europe and Japan.

In the bond market, treasuries moved significantly lower, pulling back further off their recent highs. A forecast of higher oil demand by the Organization of the Petroleum Exporting Countries and a drop in USA crude oil inventories drove the increases.

Cyclical sectors like technology, materials and energy posted the largest gains on the S&P, backed by the view that the USA economy, despite a slow start to the year, is on solid footing. Just last week the yield on the 10-year Treasury note touched an all-time low.

Stocks rallied again Tuesday as higher volume kicked in, suggesting institutional investors were active buyers. Australia's S&P/ASX 200 gained 0.3 percent to 5,367.70.

Alcoa reported a smaller-than-expected drop in quarterly profit, sending the aluminum producer's shares up 4.7 percent premarket.

Seagate Technology: Data storage company Seagate Technology PLC saw its stock surge 22 percent after announcing it was cutting 14 percent of the Seagate workforce or 6,500 jobs. West Texas Intermediate crude - generally considered to be a benchmark for USA oil prices - was up more than 4.5 percent in midday trading Tuesday for one of its strongest showings in months. Sentiment was also boosted by expectations of additional economic stimulus in struggling Japan after Prime Minister Shinzo Abe's party swept parliamentary elections.The rebound in U.S. stocks from their post-Brexit selloff is starting to take on historic dimensions.Meanwhile, Twitter Inc. slipped 2.1 percent after its rating was lowered to neutral from buy at SunTrust Robinson Humphrey.

Brent crude was last up $1.20 at $47.45 a barrel. While he has released few details, investors are betting he'll keep flooding the markets with money by expanding bond purchases using newly printed money in a program known as quantitative easing.

Elsewhere in Asia, Korea's Kospi edged up 0.1% and Hong Kong's Hang Seng added 1.7%. West Texas crude for August delivery pared 0.85% to $46.40 per barrel, still a recovery after it slipped below $45 per barrel Monday.

France's CAC 40 rose 1.7% and Germany's DAX advanced 1.4%. The yield on the 10-year United States treasury note climbed to 1.512%, from its record low of 1.366% on Friday.

The dollar rose to 104.79 yen from 102.77 yen. In other energy trading in NY, wholesale gasoline rose 5 cents to $1.43 a gallon, heating oil rose 5 cents to $1.46 a gallon and natural gas rose 3 cents to $2.73 per 1,000 cubic feet. Gold futures fell almost 2% to $1,334.10 an ounce.