RTTNews - Stocks were unable to sustain any clear direction for the majority of the Tuesday's session following an influx of earnings and economic figures, but some late buying interest helped the markets to a positive finish. The major averages all finished in the green by moderate margins, extending their gains for a second straight session.

On the economic front, a report released by the Commerce Department revealed that retail sales increased by a little more than expected in the month of June, although the sales growth was due in large part to higher gasoline prices.

The report showed that retail sales rose 0.6 percent in June following an unrevised 0.5 percent increase in May. Economists had been expecting retail sales to increase by a somewhat more modest 0.4 percent.

However, after excluding increases in gas station and motor vehicle and parts sales, retail sales actually fell 0.2 percent for the month.

In a separate report, the U.S. Labor Department revealed that producer prices, a key measure of wholesale inflation, rose 1.8 percent in June. This followed a 0.2 percent increase in the previous month. Core producer prices, which exclude food and energy prices, climbed 0.5 percent.

In an interview with RTT News, John Canally, an economist with LPL Financial discussed today's economic data, calling the reports another sign things stabilized in the second quarter.

However, in terms of the market, he said, That green shoots story is old news now. Markets now want to see actual improvement in the economy. They want to see it's getting better. On that end, he says the day's reports kind of failed that test, but I think there are better times ahead.

On the earnings front, traders largely shrugged off better than expected earnings from Goldman Sachs (GS), with some suggesting that the news was already priced in following the rally among financial stocks that was seen on Monday. Johnson & Johnson (JNJ) also beat earnings expectations but saw subdued reaction amid the day's low trading volume.

The major averages saw modest upside in late day trading and were able to creep into positive territory. The Dow closed up by 27.81 points or 0.3 percent at 8,359.49, the Nasdaq advanced by 6.52 points or 0.4 percent to 1,799.73 and the S&P 500 rose by 4.79 or 0.5 percent to 905.84

Sector News

Railroad stocks saw some of the day's strongest performances, as reflected by the 4 percent gain posted by the Dow Jones Railroads Index. With the move, the index was able to continue its advance away from a five-week closing low set last Tuesday.

CSX Corp. (CSX) boosted the railroad sector, showing a gain of 7 percent after reporting stronger than expected earnings for the second quarter.

Gold stocks also advanced by notable margins, with the NYSE Arca Gold Bugs Index rising by 2.4 percent. The day's gain helped the index to moved further off a roughly one-month closing low set early last week. Gold stocks were helped by an increase in the price of the precious metal.

While oil service, natural gas, semiconductor and airline stocks also moved notably higher, weakness was visible among health insurance and computer hardware stocks.

The Morgan Stanley Healthcare Payor Index slid by 2 percent, while the NYSE Arca Computer Hardware Index fell by 1 percent. Notably, the healthcare index finished at its worst level in nearly one month's time.

Dow Components

Shares of Home Depot (HD) led the way higher in the Dow closing up by 2.5 percent. With the upward move, the stock was able to move further away from its worst closing level in well over three months set last Tuesday.

Intel (INTC) and Disney (DIS) also saw some of the strongest gains in the Dow, rising by 2.1 percent and 1.8 percent, respectively. With the gains, both stocks were able to move off of lows set over the course of last week's trading.

While General Electric (GE), Merck (MRK) and DuPont (DD) also rose, a notable loss by Travelers (TRV) limited the upside for the Dow, with the insurance company closing down 2.1 percent. With the retreat, Travelers gave back most of the gain posted in the previous session.

Further, shares of AT&T (T) also retreated, with the telecom giant posting a 1.4 percent loss. The day's decline brought the stock to test a four-month closing low set on Friday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Tuesday's session notably higher, with Japan's benchmark Nikkei 225 Index and Hong Kong's Hang Seng Index climbing by 2.3 percent and 3.7 percent, respectively.

The major European markets also moved to the upside, with the German DAX Index and the French CAC 40 Index finishing up by 1.3 percent and 1 percent, respectively. The U.K.'s FTSE 100 Index also rose, posting a gain of 0.9 percent on the day.

In the bond markets, treasuries closed near their worst levels of the day. Subsequently, the yield on the benchmark ten-year note finished at 3.447 percent, a gain of 10.1 basis points on the day.

Looking Ahead

On Wednesday, traders will be digesting a fresh batch of earnings from Intel (INTC), Altera (ALTR) and Yum! Brands (YUM), all of which reported after the close today, while also reacting to the latest economic data.

The focus of the broader markets will likely be on consumer prices for June ahead of the start of trading tomorrow. Economists expect the headline figure to rise 0.6 percent after climbing by 0.1 percent last month. The Labor Department report is set to be released at 8:30 a.m. ET

Traders will also look to industrial production figures for June from the Federal Reserve, with economists expecting production to fall by 0.6 percent after a 1.1 decline in May. The data is scheduled for release at 9:15 a.m. ET.

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