Market Wrap for Tuesday, May 14: Stocks Rally to New Highs

The U.S. stock market notched another rally on Tuesday as momentum pushed the major averages to new year-to-date highs. Money flowed out of bonds and into equities as risk appetite remains brisk on Wall Street.

After recording a 1 percent gain on the session, the S&P 500 is up almost 16 percent on the year. The Dow Jones Industrial Average rose triple digits while the Nasdaq lagged on the day despite recording a strong gain.

Major Averages

The Dow Jones Industrial Average rose a little less than 124 points, or 0.82 percent, to 15,215.

The S&P 500 climbed almost 17 points, or 1.01 percent, to finish at 1,650.

The Nasdaq Composite added roughly 24 points, or 0.69 percent, to 3,463.

Commodities

Despite strong risk appetite in the equity market on Tuesday, prices for crude oil fell on the session. Heading into the closing bell, NYMEX crude futures were trading down around 1 percent to $94.17. Brent contracts were last down around 0.22 percent to $102.59. Natural gas prices rose on the day, notching a gain of 2.27 percent to $4.01.

Precious metals also did not benefit from a rally in stocks. At last check, COMEX gold futures had shed 0.65 percent to $1,425.00 while silver was down 1.33 percent to $23.38. In industrial metals, copper fell more than 2 percent on the day.

Volatility was limited in the grains sector and corn and wheat were trading on either side of the unchanged mark. At last check, corn was down 0.46 percent while wheat had climbed 0.14 percent. In soft commodities, cocoa and cotton traded up around 1 percent while coffee and sugar were both down better than 1 percent.

Bonds

Bond prices fell sharply again on Tuesday. Near the close, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) was down roughly 1 percent to $116.64. The fall in prices pushed yields up on the session although the 2-Year Note yield was unchanged at 0.24 percent.

The yield on the 5-Year Note rose two basis points to 0.85 percent. Both the 10-Year Note yield and the 30-Year Bond yield rose four basis points to 1.96 percent and 3.17 percent, respectively.

Currencies

The U.S. dollar rose on Tuesday. Heading into the closing bell, the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was up 0.35 percent to $22.72.

The closely watched EUR/USD pair was trading down 0.27 percent to $1.2940. Other movers included the USD/JPY, which rose 0.45 percent and the AUD/USD, which fell 0.60 percent.

Volatility and Volume

The CBOE Volatility Index rose on Tuesday despite a sharp rally in the stock market. Late in the day, the VIX was up around 1.67 percent to 12.76.

Volume was lighter than normal on the session. Only around 91 million SPDR S&P 500 ETF (NYSE:SPY) shares traded hands compared to a 3-month daily average of 126.5 million.

Stock Movers

Shares of SodaStream International (NASDAQ:SODA) were trading up almost 12 percent on Monday in the wake of an upbeat investor meeting.

Questcor Pharmaceuticals (NASDAQ:QCOR) rose throughout Tuesday's session and was last up around 13 percent. The move in the name may be related to heavy short-covering.

Sony (NYSE:SNE) jumped 10 percent after Dan Loeb's hedge fund Third Point pushed for a breakup of the company.

InterOil (NYSE:IOC) climbed around 10 percent on the day after the company's first-quarter earnings results.

Shares of private-education provider Apollo Group (NASDAQ:APOL) added around 9 percent after the company received a letter from HLC Institutional Actions Council recommending reaffirmation of its accreditation for a ten-year period.

SolarCity (NASDAQ:SCTY) fell more than 11 percent on Tuesday after the company reported a wider than expected loss for the first-quarter.

Trina Solar (NYSE:TSL) also lost around 9 percent in the wake of the results from SolarCity.

Tesla Motors (NASDAQ:TSLA) lost around 5 percent on profit taking after a steep multi-day rally in the wake of the company reporting its first-ever profit last week.

Nokia (NYSE:NOK) fell a little better than 5 percent in the wake of the company's release of its latest Lumia smartphone.

World Acceptance (NASDAQ:WRLD) lost roughly 5 percent after the company was mentioned cautiously by short-selling research firm Citron Research.