Market Wrap for Tuesday, April 16: Stock Market Rebounds Strongly From Monday's Sharp Losses

The stock market rebounded strongly on Tuesday after recording steep losses to begin the week on Monday.

A surging euro and better than expected housing data helped spur investor confidence. Gold and silver prices also stabilized on the day after recording tremendous losses over the course of the last two trading sessions.

Major Averages

The Dow Jones Industrial Average climbed almost 158 points, or 1.08 percent, to close at 14,757.

The S&P 500 rose better than 22 points, or 1.43 percent, to finish at just below 1,575.

The Nasdaq Composite added 48 points, or 1.50 percent, to 3,265 on Tuesday.

CPI

Consumer prices fell 0.2 percent for March after registering an increase of 0.7 percent in February. This compared to consensus estimates which called for a decrease in CPI of 0.1 percent.

On a core basis, which excludes volatile food and energy costs, consumer prices rose 0.1 percent in March versus a gain of 0.2 percent in February. This was below the consensus which expected prices to rise 0.2 percent in the most recent month.

The CPI reading is another sign that the economy is still susceptible to deflationary pressures. These concerns are one of the reasons for the recent sell-off in commodities.

Housing Starts

Housing starts were up 7.0 percent to 1.036 million in March from 968,000 in February. This compared to consensus estimates of 930,000.

Building Permits

Building permits for the month of March fell 3.9 percent to 902,000 from a downwardly revised 939,000 in February. This compared to consensus estimates of 945,000 building permit issuances.

Commodities

Commodity prices stabilized on Tuesday after a huge sell-off to start the week. Near the close of equities, NYMEX crude futures were unchanged at $88.71. Brent crude futures were last down 0.80 percent to $99.82. Natural gas climbed 0.73 percent to $4.16.

Precious metals were mixed on the session after plummeting on Tuesday. COMEX gold futures were last trading up 0.46 percent to $1,368.20. Silver futures were down 0.18 percent to $23.35 at last check. Near the close, copper futures had added 0.95 percent.

The grain complex moved higher on Tuesday. At last check, corn was up around 2 percent while wheat had climbed a little better than 1 percent. In soft commodities, movers included cocoa, which added around 2 percent and sugar which was up a little less than 2 percent.

Bonds

Bonds fell as stocks surged on the day. Near the close of equity trading, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) had lost 0.80 percent to $122.00. Yields rose as bond prices fell on the session.

The yield on the 2-Year Note rose one basis point to 0.23 percent. The 5-Year Note yield added two basis points on the session to 0.70 percent.

Yields on the 10-Year Note and 30-Year Bond both rose four basis points to 1.72 percent and 2.90 percent, respectively.

Currencies

The U.S. dollar fell sharply on Tuesday. Near the close, the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.80 percent to $22.23.

The closely watched EUR/USD pair surged more than 1 percent on the day to $1.3191. Other movers included the GBP/USD, which added 0.59 percent, and the AUD/USD which was last up 0.57 percent.

Volatility and Volume

After surging more than 40 percent on Monday amid a sell-off across asset classes, the VIX plunged more than 19 percent on Tuesday to 13.95.

Volume for the SPDR S&P 500 ETF (NYSE:SPY) was right around the 3-month average on Tuesday with roughly 125 million shares trading hands. Volume spiked on Monday as markets plummeted, which pushed up the 3-month average volume for SPY to around 126 million shares.

Stock Movers

Acorda Therapeutics (NASDAQ:ACOR) was a big gainer for the second straight day. The stock was trading up better than 12 percent near the close. The company announced positive Phase II data for its AMPYRA drug on Monday.

Shares of W.W. Grainger (NYSE:GWW) jumped better than 7 percent after the company reported better than expected fiscal first-quarter financial results.

Halcon Resources (NYSE:HK) bounced back after big losses on Monday. The stock was last trading up better than 9 percent.

Sarepta Therapeutics (NASDAQ:SRPT) fell more than 13 percent after analysts at Leerink Swann downgraded the shares from Outperform to Market Perform.

Netgear (NASDAQ:NTGR) fell nearly 8 percent on Tuesday after the company lowered its fiscal first-quarter guidance.

Barrick Gold (NYSE:ABX), which has been in a significant downtrend, lost another 5 percent on the session despite gold futures stabilizing on the day.