After moving sharply higher early in the session, stocks remain mostly positive in afternoon trading on Wednesday. While the Dow has pulled back well off its best levels, the Nasdaq and the S&P 500 continue to post strong gains.
Currently, the Nasdaq is up 292.29 points or 2.5 percent at 11,854.87, and the S&P 500 is up 49.98 points or 1.3 percent at 3,971.03. Meanwhile, the Dow is up 52.95 points or 0.2 percent at 31,814.49 after jumping by nearly 200 points earlier in the session.
The rally on Wall Street partly reflects strong gains by Google parent Alphabet (GOOGL) and software giant Microsoft (MSFT).
Shares of Alphabet are surging by 6.9 percent after ending Monday’s trading at its lowest closing level in well over a year.
The rebound by Alphabet comes as the company reported second quarter results that missed analyst estimates but were not as bad as some investors had feared.
Shares of Microsoft are also jumping by 4.9 percent after the company reported weaker than expected fiscal fourth quarter results but provided upbeat guidance.
On the other hand, shares of Visa (V) have moved sharply lower in recent trading, contributing to the pullback by the Dow. The drop by Visa comes even though the credit card giant reported better than expected fiscal third quarter results.
The overall strength on Wall Street also comes as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.
With the Fed widely expected to raise interest rates by another 75 basis points, traders are likely to keep a close eye on the accompanying statement and Fed Chair Jerome Powell’s post-meeting press conference for clues about the outlook for future rate hikes.
On the U.S. economic front, the Commerce Department released a report on Wednesday showing an unexpected surge in new orders for U.S. manufactured durable goods in the month of June.
The Commerce Department said durable goods orders jumped by 1.9 percent in June after climbing by 0.8 percent in May. The continued increase surprised economists, who had expected durable goods orders to dip by 0.4 percent.
Excluding a spike in orders for transportation equipment, durable goods orders rose by 0.3 percent in June following a 0.5 percent increase in May. Economists had expected ex-transportation orders to edge up by 0.2 percent.
Meanwhile, a separate report from the National Association of Realtors showed pending home sales in the U.S. pulled back sharply in the month of June.
NAR said its pending home sales index plunged by 8.6 percent to 91.0 in June after rising by 0.4 percent to a revised 99.6 in May.
Economists had expected pending home sales to slump by 1.5 percent compared to the 0.7 percent increase originally reported for the previous month.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Sector News
Semiconductor stocks continue to see substantial strength in afternoon trading, resulting in a 2.9 percent spike by the Philadelphia Semiconductor Index.
Significant strength has also emerged among airline stocks, with the NYSE Arca Airline Index soaring by 2 percent on the day.
Oil service stocks have also shown a strong move to the upside, driving the Philadelphia Oil Service Index up by 1.9 percent. The strength in the sector comes as the price of crude oil for September delivery is surging $1.98 to $96.96 a barrel.
Retail, networking and brokerage stocks are also seeing considerable strength, while tobacco stocks have moved sharply lower.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index edged up by 0.2 percent, while Hong Kong’s Hang Seng Index slumped by 1.1 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index advanced by 0.8 percent, the U.K.’s FTSE 100 Index climbed by 0.6 percent and the German DAX Index rose by 0.5 percent.
In the bond market, treasuries are seeing modest strength ahead of the Fed announcement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.4 basis points at 2.763 percent.
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