After ending the previous session sharply higher, stocks are seeing continued strength in morning trading on Wednesday. The major averages have all shown strong moves to the upside on the day, with the tech-heavy Nasdaq showing a particularly strong advance.
The major averages have pulled back off their best levels in recent trading but remain firmly positive. The Dow is up 486.01 points or 1.8 percent at 27,966.04, the Nasdaq is up 388.82 points or 3.5 percent at 11,549.49 and the S&P 500 is up 81.30 points or 2.4 percent at 3,450.46.
The continued strength on Wall Street comes amid signs that the U.S. elections will not result in a “blue wave” that sees the Democrats reclaiming both the White House and the Senate.
Votes are still being counted in a number of key swing states, but traders seem optimistic that Democrats will not take control of the Senate and roll back key tax cuts.
The White House remains up for grabs, but President Donald Trump’s projected wins in states like Texas and Florida seems to have set traders’ minds at ease.
Meanwhile, traders have largely shrugged off a report from payroll processor ADP showed private sector employment increased by much less than expected in the month of October.
ADP said private sector employment rose by 365,000 jobs in October after spiking by an upwardly revised 753,000 jobs in September.
Economists had expected private sector employment to surge by 650,000 jobs compared to the jump of 749,000 jobs originally reported for the previous month.
“The labor market continues to add jobs, yet at a slower pace,” said Ahu Yildirmaz, vice president and cohead of the ADP Research Institute. “Although the pace is slower, we’ve seen employment gains across all industries and sizes.”
A separate report released by the Commerce Department showed the U.S. trade deficit narrowed in the month of September.
The Commerce Department said the trade deficit narrowed to $63.9 billion in September from a revised $67.0 billion in August.
Economists had expected the deficit to narrow to $63.8 billion from the $67.1 billion originally reported for the previous month.
The narrower deficit came as the value of exports jumped by 2.6 percent to $176.4 billion, while the value of imports rose by 0.5 percent to $240.2 billion.
Growth in U.S. service sector activity slowed by more than expected in the month of October, according to a report released by the Institute for Supply Management.
The ISM said its services PMI dipped to 56.6 in October from 57.8 in September, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to edge down to 57.5.
Biotechnology stocks have moved sharply higher in morning trading, resulting in a 5.9 percent spike by the NYSE Arca Biotechnology Index.
Substantial strength is also visible among pharmaceutical and healthcare stocks, with the NYSE Arca Pharmaceutical Index and the Dow Jones U.S. Health Care Index jumping by 5.2 percent and 4.8 percent, respectively.
Software, housing and semiconductor stocks are also seeing considerable strength, while banking and steel stocks are showing notable moves to the downside.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index jumped by 1.7 percent, while Hong Kong’s Hang Seng Index dipped by 0.2 percent.
Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the French CAC 40 Index has surged up by 2.3 percent, the German DAX Index is up by 1.8 percent and the U.K.’s FTSE 100 Index is up by 1.5 percent.
In the bond market, treasuries have moved sharply higher after coming under pressure in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 11.4 basis points at 0.768 percent.
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