Market Wrap for Tuesday, May 21: Stocks Record Modest Gains Ahead of Bernanke Testimony

U.S. stocks staged a modest rally on Tuesday ahead of Congressional testimony from Federal Reserve Chairman Ben Bernanke on Wednesday.

The expectation that the central bank will continue to lend support to the markets helped sustain risk appetite on the day.

Investors were also encouraged by a client note issued by Goldman Sachs which predicted that the S&P 500 will rise another 5 percent from Monday's close to finish the year at 1,750. In one year's time, the firm sees the S&P trading at 1,825.

The Dow was the strongest performing index on Tuesday, but both the S&P and Nasdaq also notched small gains. Nevertheless, share prices did finish off of their best levels of the session.

Major Averages

The Dow Jones Industrial Average rose 52 points, or 0.34 percent, to just below 15,388.

The S&P 500 climbed 3 points, or 0.17 percent, to 1,669.

The Nasdaq added a little less than 6 points, or 0.16 percent, to close at 3,502.

Commodities

Crude oil prices fell marginally on Tuesday despite a higher market. Late in the day, NYMEX crude futures were down 0.57 percent to $96.16. Brent crude contracts had lost 1 percent and were trading at $103.75. Natural gas, however, jumped 2.47 percent and was last trading at $4.19.

A day after staging a sharp rally, precious metals were lower. At last check, COMEX gold futures had shed 0.67 percent to $1,374.80 while silver had lost 1 percent to $22.36. Copper futures fell 0.63 percent on Tuesday.

In the agricultural complex, both corn and wheat lost ground on the session. Corn was last down around 1.46 percent while wheat lost 0.69 percent.

In soft commodities, movers included cocoa, which was up almost 2 percent and coffee which fell almost 2 percent. Cotton futures were last trading down 2.24 percent.

Bonds

Near the close of the equity market, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) was last up 0.68 percent to $117.74. The move up in prices caused yields to fall on the session.

While the 2-Year Note yield was unchanged at 0.23 percent, the yield on the 5-Year Note lost one basis point to 0.82 percent.

The 10-Year Note yield fell three basis points to 1.94 percent. The 30-Year Bond yield fell four basis points to 3.14 percent.

Currencies

The U.S. dollar was basically unchanged on Tuesday. Heading into 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 flat at $22.78.

The closely watched EUR/USD pair was last up 0.10 percent to $1.2910. Other movers included the GBP/USD, which fell 0.64 percent and the USD/CAD, which rose around 0.49 percent.

Volatility and Volume

The CBOE Volatility Index climbed a little better than 2 percent despite a higher market. The widely watched barometer of market fear was trading at 13.33 late in the day.

Volume was light once again on the session. Only around 80 million SPDR S&P 500 ETF (NYSE:SPY) shares traded hands compared to a 3-month daily average of just under 125 million.

Stock Movers

OpenTable (NASDAQ:OPEN) was up around 9 percent near the close on Tuesday after online takeout companies GrubHub and Seamless announced a merger.

Retailer Saks (NYSE:SKS) jumped almost 10 percent on the session after announcing strong results for its fiscal first-quarter.

Sony (NYSE:SNE) climbed around 9 percent after a sharp mid-day rally after Microsoft (NASDAQ:MSFT) stumbled through its announcement of the XBOX One. Sony makes competing gaming console Playstation.

Shares of OSI Systems (NASDAQ:OSIS) plunged for the second day in a row after the Department of Homeland Security notified the company's security subsidiary Rapsican that it has issued a Notice of Proposed Debarment in connection with a Show Cause letter from the TSA. The stock closed down around 13 percent.

SolarCity (NASDAQ:SCTY) fell almost 14 percent on Tuesday on profit taking as the stock has staged a massive rally in recent weeks.