Stocks moved to the downside early in the session on Wednesday but showed a notable turnaround over the course of the trading day. The major averages climbed well off their early lows, with the Nasdaq and the S&P 500 closing in positive territory.
The Nasdaq rose 70.09 points or 0.4 percent to 15,845.23 and the S&P 500 inched up 10.76 points or 0.2 percent to 4,701.46. Meanwhile, the Dow bounced well off its worst levels but still closed down 9.42 points or less than a tenth of a percent at 35,804.38.
The early weakness on Wall Street came amid a continued increase in U.S. treasury yields, with the yield on the benchmark ten-year note reaching its highest intraday level in six months.
Yields were extending the upward move seen since President Joe Biden announced his intent to re-nominate Federal Reserve Chair Jerome Powell amid concerns the central bank could accelerate plans to tighten monetary policy.
A Labor Department report showing first-time claims for U.S. unemployment benefits slid to their lowest level in over fifty years in the week ended November 20th helped push yields higher.
The Labor Department said initial jobless claims tumbled to 199,000, a decrease of 71,000 from the previous week’s revised level of 270,000.
Economists had expected jobless claims to edge down to 260,000 from the 268,000 originally reported for the previous week.
With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 197,000 in November of 1969.
Yields showed a notable downturn over the course of the trading day, however, with the pullback contributing to the rebound on Wall Street.
The volatility in the bond market came amid the release of slew of U.S. economic data in addition to the weekly jobless claims report.
The Commerce Department released separate reports showing an unexpected drop in durable goods orders but an increase in new home sales in the month of October.
Another Commerce Department showed personal income and spending both increased by more than expected during the month.
Meanwhile, traders largely shrugged off the release of the minutes of the Federal Reserve early November monetary policy meeting.
While the minutes said some participants felt the Fed should be prepared to raise interest rates sooner than currently anticipated if inflation continues to run high, traders may have viewed the sentiment as old news.
Most of the major sectors ended the day showing only modest moves, although computer hardware stocks moved sharply higher, driving the NYSE Arca Computer Hardware Index up by 3 percent to a five-month closing high
HP Inc. (HPQ) led the sector higher, spiking by 10.1 percent after the computer and printer maker reported fiscal fourth quarter results that beat expectations and raised its first quarter guidance.
Interest rate-sensitive commercial real estate stocks also showed a strong move to the upside, with the Dow Jones U.S. Real Estate Index climbing by 1.2 percent to its best closing level in well over two months.
Natural gas and semiconductor stocks also saw some strength on the day, while steel stocks moved notably lower over the course of the session.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index tumbled by 1.6 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.
The major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index closed just below the unchanged line and the German DAX Index fell by 0.4 percent.
In the bond market, treasuries showed a notable turnaround after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 1.645 percent after reaching a high of 1.693 percent.
Following the Thanksgiving Day holiday on Thursday, trading activity is likely to remain light on Friday ahead of an early close by the markets.
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