Following the sell-off seen in the previous session, stocks have moved back to the upside in morning trading on Wednesday. The major averages have all moved to the upside but only partly offset yesterday’s steep losses.
The major averages have pulled back off their best levels in recent trading but remain positive. The Dow is up 134.91 points or 0.4 percent at 34,434.90, the Nasdaq is up 75.12 points or 0.5 percent at 14,621.80 and the S&P 500 is up 19.54 points or 0.5 percent at 4,372.17.
The rebound on Wall Street partly reflects bargain hunting, as traders pick up stocks at relatively reduced levels following yesterday’s sell-off.
The tech-heavy Nasdaq saw its worst day since March on Tuesday, ending the session at its lowest closing level in over a month. The S&P 500 also tumbled to a two-month closing low.
A pullback by treasury yields has also generated some buying interest, with the ten-year yield moving lower after ending the previous session at its highest closing level in three months.
Indications the Federal Reserve plans to begin scaling back its asset purchases in the near future has contributed to a recent spike in yields, which move opposite of bond prices.
On the U.S. economic front, the National Association of Realtors released a report showing pending home sales skyrocketed by much more than expected in the month of August.
NAR said its pending home sales soared by 8.1 percent to 119.5 in August after tumbling by 2.0 percent to a revised 110.5 in July.
Economists had expected pending home sales to jump by 1.4 percent compared to the 1.8 percent slump originally reported for the previous month.
The pending home sales index reached its highest level since January but was still down by 8.3 percent compared to the same month a year ago.
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.
Despite the rebound by the broader markets, most of the major sectors are showing only modest moves on the day after ending the previous session sharply higher.
Retail stocks have shown a notable move to the upside, however, with the Dow Jones U.S. Retail Index climbing by 1.2 percent. The index ended Tuesday’s trading at its lowest closing level in over a month.
Pharmaceutical and utilities stocks are also seeing some strength on the day, while gold stocks are moving lower along with the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index plummeted by 2.1 percent, while China’s Shanghai Composite Index dove by 1.8 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the U.K.’s FTSE 100 Index is up by 0.9 percent, the French CAC 40 Index and the German DAX Index are up by 0.8 percent and 0.7 percent, respectively.
In the bond market, treasuries are regaining ground after moving sharply lower over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.6 basis points at 1.508 percent.
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