Investing.com – Wall Street bounced back from the prior day’s slight losses on Tuesday with the S&P and Nasdaq both hitting new intraday highs in morning trade as investors weighed bullish and bearish factors.
At 15:35GMT or 11:35AM ET, the Dow Jones gained 47 points, or 0.26%, while the S&P 500 advanced 5 points, or 0.24%, and the tech-heavy Nasdaq Composite traded up 21 points, or 0.41%.
As part of the bullish side of the argument, market participants were taking note of a growing earnings momentum as the second quarter earnings season winds down this week.
The slew of earnings out priced into stocks on Tuesday was largely positive.
Among big movers, Endo International PLC (NASDAQ:ENDP) helped lead the S&P 500 higher with gains of close to 28% after both the top and bottom line beat estimates.
Valeant Pharmaceuticals (NYSE:VRX) jumped more than 15% despite worse-than-expected earnings as the Canadian drugmaker backed its full-year guidance.
Red Robin Gourmet Burgers Inc (NASDAQ:RRGB) soared more than 10% after presenting second quarter earnings and forecasting full-year revenue to rise 5%.
Microchip Technology Incorporated (NASDAQ:MCHP) jumped 8% on Tuesday after its fiscal first quarter revenue beat consensus.
On the downside, Wayfair Inc (NYSE:W) and LendingClub Corp (NYSE:LC) tumbled 17% and 4% after reporting wider than expected losses.
In that context, all eyes would be on Walt Disney’s numbers after the close.
Also adding to bullish sentiment in global stocks were central bank policies.
To the contrary of the easing from monetary authorities in the U.K., euro zone, Japan or China, market participants were continuing to weigh the possibility that the Federal Reserve (Fed) could return to the path of policy normalization.
However, Fed funds futures gave just a 50.3% chance for an increase at the end of the year on Tuesday.
From the bearish perspective, and not unlike comments from some Fed officials themselves, investors were concerned over the prospects for the global economy plagued with subdued growth and the possible impact on U.S. corporate earnings.
Among other bearish factors, volatility continued to move lower with the VIX down another 3% on Tuesday, trading near lows not seen since mid-2014.
Regardless, investor sentiment continued to be optimistic with both the S&P and Nasdaq trading at new all-time intraday highs, though oil was having a rough time following up on Monday’s 3% rise.
Hopes for some kind of production freeze agreement among OPEC members in informal discussions to take place at the end of September were weighed against continued concern over the global supply gut as investors looked forward to fresh weekly information on U.S. stockpiles of crude and refined products.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 1.0 million barrels in the week ended August 5.
U.S. crude futures gained 0.23% to $43.12 by 15:36GMT, or 11:36AM ET, while Brent oil slipped 0.09% to $45.35.
On Tuesday’s economic front, second quarter nonfarm productivity unexpectedly fell for a third consecutive quarter, the longest stretch since 1979, causing concern over corporate profits.
Unit labor costs for the April to June period increased at a brisker pace than expected.
The “dilemma” is that a faster pace of labor compensation than productivity implies that prices would either need to be passed on or could squeeze firm’s profit.
June wholesale inventories, meanwhile, increased at a faster than expected 0.3% pace, suggesting that second quarter gross domestic product could be upwardly revised.
In other company news outside of earnings, Honeywell International (NYSE:HON) was reported to be in talks to acquire JDA Software in a deal that could be worth $3 billion, according to sources cited by Reuters.
In other M&A news, Randstad Holdings NV (OTC:RANJY) plans to buy U.S. rival Monster Worldwide Inc (NYSE:MWW) for approximately $429 million. The $3.40 per share offer represents a 23% premium to Monster's closing price on Monday.