Stocks rally higher as commodity prices rebound
The US stocks closed higher on Tuesday as investors begin to heavily buy shares as commodities producers slowly beginning to balance their output helping its price to rebound.
The S&P 500 also recorded a three-month high and the Nasdaq 100 also recorded an increase yesterday.
The rally marks a good prospect by analysts as the market is slowly recovering from a bad third-quarter reports.
According to Bloomberg, the S&P 500 increase by 0.3 percent to 2,109.79 at midday and the rally continues helping the index to close at just 1 percent below its highest in May.
Besides S&P 500, other indexes also recorded a great performance on Tuesday. CNBC reported that the Nasdaq 100 closed at 0.3 percent higher at 4,719.05 topping its previous high the March 2000.
The Dow Jones Industrial average also recorded an increase of 89.39 points to close at 17,918.15.
According to an analyst, the upward momentum is signalling that investors worry over China impact on the global economy are slowly fading.
The better than expected third-quarter report by most businesses in the US also help to strengthen the shares upward momentum.
The chief investment officer at McQueen, Ball & Associate Inc, Bill Schultz, said that the market is "back to where we were before the downturn took place, with reasonable earnings, modest growth and low-interest rates."
This after global stocks saw a massive selling due to panic after China devalued its currency in the middle of the year due to lower than expected economic prospect in the country.
Besides that, most central banks outside the US also signals that there will be more stimulus injected to help stimulate the economic soon. Investors are also welcoming the Fed decision to keep the interest rates at near-zero value helping to increase more borrowing by businesses.
The commodities prices also play a huge impact on these indexes, as most of the energy companies are leading the gain in the S&P 500's 10 main groups.
Chevron Corp. and Exxon Mobil lead the gainers with an increase of 1.8 percent. While in other commodities sectors, The Guardian reported that Glencore helps to push the mining shares higher as the companies managed to cut more debts in the previous quarter.
Michael Antonelli from Robert W. Baird & Co. said that the main reason why commodities stocks play a huge impact on the rise of the index.
They're the sectors that were left for dead. When you get these pain-trade rallies like we're seeing right now, those are the sectors that people go to because they're under-owned."