After showing a lack of direction throughout much of the session, stocks moved sharply higher in the latter part of the trading day on Wednesday. The markets extended the strong upward move seen in the previous session, regaining some ground following the substantial weakness seen in recent weeks.
The major averages all closed firmly in positive territory, near their best levels of the day. The Dow jumped 143.95 points or 1.3 percent to 11,320.71, the Nasdaq rose 21.63 points or 0.9 percent to 2,467.69 and the S&P 500 shot up 15.25 points or 1.3 percent to 1,177.60.
The strength in the markets may have been partly due to some upbeat economic data, with a report from the Commerce Department showing a much bigger than expected increase in durable goods orders in the month of July.
The report showed that durable goods orders came in at $201.5 billion, an increase of $7.7 billion or 4 percent from the previous month. Most economists had predicted a more modest 2 percent increase.
Additionally, June orders were revised upward to show a less steep, 1.3 percent decline compared to the 2.1 percent drop initially reported.
Paul Dales, Senior U.S. Economist at Capital Economics, said, "July's U.S. durables goods orders are certainly not as good as they look. Nonetheless, they still suggest that business investment growth may actually accelerate in the third quarter."
However, traders continued to express uncertainty about the next move by the Federal Reserve, looking ahead to Fed Chairman Ben Bernanke's speech at a conference in Jackson Hole, Wyoming, on Friday.
While Bernanke is not expected to announce any specific plans for the Fed, traders will be paying close attention to his remarks for any indications regarding the likelihood of further economic stimulus efforts from the central bank.
Meanwhile, traders largely shrugged off news that Moody's lowered its rating on Japanese government debt. Moody's cut the rating to Aa3 from Aa2, citing "weak" economic prospects that could hamper the government's ability to meet deficit reduction targets.
Sector News
Banking stocks saw considerable strength on the day, helping to lead the markets higher. The KBW Bank Index surged up by 3.3 percent, climbing further off the two-year closing low it set on Monday.
Bank of America (BAC) turned in one of the sector's best performances, jumping by 11 percent after ending the previous session at its worst closing level in well over two years.
Significant strength also emerged among housing stocks, as reflected by the 3.7 percent gain posted by the Philadelphia Housing Sector Index. Within the sector, Toll Brothers (TOL) rose by 4.6 percent after reporting better than expected third quarter earnings.
Defense and utilities stocks also showed strong upward moves, driving the Philadelphia Defense Sector Index and the Dow Jones Utilities Average up by 2.1 percent and 1.9 percent, respectively.
While most of the other major sectors also moved to the upside, gold stocks posted steep losses amid a sharp pullback by the price of the precious metal. The NYSE Arca Gold Bugs Index fell by 2.2 percent, as gold for December delivery plummeted $104 to $1,757.30 an ounce.
Other Markets
In overseas trading, stock markets came under pressure on Wednesday amid the news of the downgrade of Japan's credit rating. Japan's benchmark Nikkei 225 Index fell by 1.1 percent, while Hong Kong's Hang Seng Index dropped by 2.1 percent.
Meanwhile, the major European markets showed notable moves to the upside on the day. The U.K.'s FTSE 100 Index rose by 1.5 percent, the French CAC 40 Index advanced by 1.8 percent, and the German DAX Index surged up by 2.7 percent.
In the bond market, treasuries saw considerable weakness, pulling back further off their recent highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 12.3 basis points to 2.26 percent.
Looking Ahead
While the Labor Department's weekly jobless claims report may attract some attention on Thursday, trading activity may be somewhat subdued ahead of Bernanke's speech on Friday.
Get Ready To Start Engine Guys :)
Get Ready To Fly To The Moon ^_^
0 comments:
Posting Komentar