Dow Showing Notable Advance, Nasdaq Nearly Unchanged

Stocks have moved mostly higher over the course of the trading day on Wednesday, although the tech-heavy Nasdaq is bucking the uptrend after posting strong gains in the two previous sessions. The Dow is showing a notable advance after ending Tuesday’s trading nearly flat.

The Dow is up 213.06 points or 0.8 percent at 28,208.66 and the S&P 500 is up 14.38 points or 0.4 percent at 3,415.58, while the Nasdaq is nearly unchanged, up just 0.63 points or less than a tenth of a percent at 11,190.96.

The strength on Wall Street comes as traders expect a dovish monetary policy announcement from the Federal Reserve later this afternoon.

The Fed is widely expected to leave interest rates unchanged, but investors are likely to pay close attention to any tweaks to the accompanying statement.

The central bank’s latest economic projections may also attract attention, with many economists expecting the Fed to forecast near-zero rates for years to come.

The Fed may seek to calm the markets following recent volatility, although some analysts have questioned how much more the central bank can do given its ultra-loose monetary policy.

The Dow is also benefiting from strong gains by Walgreens Boots Alliance (WBA), Chevron (CVX) and Goldman Sachs (GS).

Meanwhile, a notable decline by shares of Apple (AAPL) is weighing on the Nasdaq, with the tech giant slumping by 1.5 percent.

In U.S. economic news, the Commerce Department released a report showing a notable slowdown in the pace of retail sales growth in the month of August.

The Commerce Department said retail sales rose by 0.6 percent in August after climbing by a downwardly revised 0.9 percent in July.

Economists had expected retail sales to surge up by 1.0 percent compared to the 1.2 percent jump originally reported for the previous month.

Excluding sales by motor vehicles and parts retailers, retail sales climbed by 0.7 percent in August after leaping by a downwardly revised 1.3 percent in July.

Ex-auto sales were expected to increase by 0.9 percent compared to the 1.9 percent spike originally reported for the previous month.

The report also said closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, edged down by 0.1 percent in August after climbing by 0.9 percent in July.

“Consumers are being increasingly cautious with their outlays as the summer comes to a close,” said Gregory Daco, Chief U.S. Economist at Oxford Economics.

He added, “If Congress is unable to extend fiscal aid to US households in the coming weeks, the US economy will be particularly susceptible to a cutback in consumer outlays – especially from the lowest income families.”

A separate report from the National Association of Home Builders showed homebuilder confidence jumped to a record high in September.

The report said the NAHB/Wells Fargo Housing Market Index shot up to 83 in September from 78 in August. Economists had expected the index to come in unchanged.

With the unexpected increase, the index rose to its highest level in the 35-year history of the series, surpassing the previous record high of 78 that was set last month and also matched in December 1998.

Sector News

Energy stocks have moved sharply higher over the course of the trading session, benefiting from a significant increase by the price of crude oil.

Crude for October delivery is jumping $1.57 to $39.85 a barrel following the release of a report showing an unexpected weekly drop in crude oil inventories.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index has soared by 4.4 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index have surged up by 3.5 percent and 3.2 percent, respectively.

Substantial strength has also emerged among airline stocks, as reflected by the 2.7 percent spike by the NYSE Arca Airline Index.

Banking stocks are also regaining ground after bucking the uptrend in the previous session, with the KBW Bank Index climbing by 2.3 percent.

Housing, brokerage, and computer hardware stocks are also seeing considerable strength, moving higher along with most of the other major sectors.

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 inched up by 0.1 percent, while China’s Shanghai Composite Index fell by 0.4 percent.

The major European markets also ended the day mixed amid cautious trading. While the U.K.’s FTSE 100 Index slid by 0.4 percent, the French CAC 40 Index crept up by 0.1 percent and the German DAX Index rose by 0.3 percent.

In the bond market, treasuries have pulled back near the unchanged line after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 0.671 percent.

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