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Tuesday's Market Wrap: Stocks Start Shortened Week With Moderate Gains

Cummins Inc. NYSE:CMI, CEPHEID NASDAQ:CPHD - Tuesday's Market Wrap: Stocks Start Shortened Week With Moderate Gains

The U.S. stock market began the holiday-shortened trading week on Tuesday with moderate gains. All three major averages finished the session in positive territory after climbing for most of the day after an early selloff. The gains were led by the energy and utilities sector, which added 1.22 percent and 1.24 percent, respectively.

Gainers included Navistar International Corp NAV 40.65%, which jumped more than 40 percent on news of a strategic alliance with Volkswagen, and Cepheid CPHD 52.61%, which jumped almost 53 percent on buyout news. Losers included Cummins Inc. CMI 7.31%, which fell more than 7 percent, and Minerals Technologies Inc MTX 6.74%, which fell almost 7 percent on the session after the unexpected death of the company's CEO.

Major Averages

The Dow Jones Industrial Average rose 46 points, or 0.25 percent, to close at 18,538.

The S&P 500 added 6.50 points, or 0.30 percent, to finish at 2,186.

The Nasdaq climbed 26 points, or 0.50 percent, to close at 5,276.

ISM Services

The ISM Services Index for August came in at 51.4, which was below the consensus estimate of 54.7 and the prior reading of 55.5.

Commodities

The commodity complex was higher to start the week. The Bloomberg Commodity Index added 0.48 percent on the session and all other commodity indices were also higher.

NYMEX crude oil futuresrose 0.95 percent to $44.86 while Brent contracts fell 0.67 percent to $47.31. Natural gas registered a 2.54 percent decline and contracts were last trading at $2.72.

Precious metals rose on Tuesday. COMEX gold futures were last up 2.05 percent to $1,353.90. The SPDR Gold Trust ETF GLD 1.69% climbed 1.69 percent to $128.71. Silver futures surged 4 percent to $20.14 on the day. The iShares Silver Trust ETF SLV 3.31% jumped 3.31 percent and closed the equity session at $19.05.

In the grains complex, corn and wheat were both mostly unchanged on the session. Corn futures closed the day with no movement at $3.2850 while wheat futures declined 0.19 percent to $3.9850.

Bonds

Treasury prices were higher on the day despite the gains in the stock market. At the close of equities, the iShares Barclays 20+ Year Treasury Bond ETF TLT 0.73% was up 0.73 percent to $139.64.

Treasury yields were as follows on Tuesday afternoon: The yield on the 2-Year Note was 0.74 percent. The 5-Year Note was yielding 1.13 percent. The 10-Year Note was last yielding 1.55 percent while the 30-Year Bond yield was 2.24 percent.

Currencies

The U.S. Dollar fell on Tuesday in conjunction with the rise in commodity prices. The PowerShares DB US Dollar Index Bullish ETF UUP 1.17%, which tracks the performance of the greenback versus a basket of foreign currencies, fell 1.17 percent to $24.50. The closely watched EUR/USD pair climbed 0.95 percent to 1.1253 euros.

Volatility and Volume

The CBOE Volatility Index (VIX) climbed slightly on Tuesday despite gains in the stock market. By the close of trading, the VIX was up 0.33 percent to 12.02. Despite the jump in the so-called "Fear Index," the VIX remains near 52-week low levels.

The current pattern of very light daily volumes continued on Tuesday. Only around 48 million shares of the SPDR S&P 500 ETF SPY 0.3% traded hands versus a 3-month daily average of 89.4 million shares. Trading in the PowerShares QQQ Trust QQQ 0.62%, a heavily traded instrument as it tracks the Nasdaq 100, was also below average with 17 million shares trading hands compared to a 3-month daily average of just over 21 million shares.

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