U.S. Stocks Give Back Ground After Early Move To The Upside

After moving mostly higher early in the session, stocks have given back ground over the course of the trading day on Wednesday. The major averages have pulled back well off their highs of the session, with the tech-heavy Nasdaq slipping into negative territory.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is down 12.66 points or 0.1 percent at 14,340.98, the S&P 500 is up 9.99 points or 0.2 percent at 4,564.97 and the Dow is up 146.31 points or 0.4 percent at 35,098.24.

The early strength on Wall Street extended the upward trend seen for much of the past two weeks, with the Dow moving higher for the eighth consecutive session.

Encouraging inflation data helped trigger the advance, as traders grow increasingly optimistic the Federal Reserve is nearing the end of its interest rate hikes.

The Fed is widely expected to raise rates by another quarter point next week, but traders are hopeful that will be the last.

Data indicating the economy has held up relatively well in spite of the Fed’s aggressive rate hikes has also led to confidence the economy will avoid a “hard landing.”

Largely upbeat earnings news has added to the positive sentiment as traders look ahead to the release of quarterly results from IBM Corp. (IBM), Netflix (NFLX) and Tesla (TSLA) after the close of trading.

Regional banks U.S. Bancorp (USB), Ally Financial (ALLY) and Citizens Financial (CFG) are posting standout gains after reporting better than expected quarterly earnings.

Buying interest has waned somewhat over the course of the session, however, leading some traders to cash in on the recent strength in the markets.

The advance seen early in the session lifted the major averages to their best intraday levels in over a year, raising questions about further upside for the markets.

Sector News

Telecom stocks continue to see substantial strength on the day, extending the recovery from the sell-off seen on Friday and Monday.

The NYSE Arca North American Telecom Index has spiked by 3.6 percent, climbing further off its lowest closing level in over three years.

Significant strength also remains visible among banking stocks, as reflected by the 2.7 percent jump by the KBW Bank Index. With the gain, the index has reached a four-month intraday high.

Interest rate-sensitive utilities and commercial real estate stocks are also seeing notable strength on the day, while steel and semiconductor stocks have moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index shot up by 1.2 percent, while Australia’s S&P/ASX 200 Index rose by 0.6 percent.

Most European stocks also moved to the upside on the day. The U.K.’s FTSE 100 Index surged by 1.8 percent and the French CAC 40 Index inched up by 0.1 percent, although the German DAX Index bucked the uptrend and edged by 0.1 percent.

In the bond market, treasuries have moved higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 3.766 percent.

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