Stocks have turned in a lackluster performance over the course of the session on Wednesday but are seeing modest strength in mid-day trading. Buying interest has remained subdued, limiting the upside for the major averages.
Currently, the major averages are posting slim gains. The Dow is up 62.77 points or 0.2 percent at 26,903.17, the Nasdaq is up 8.26 points or 0.1 percent at 10,688.62 and the S&P 500 is up 6.67 points or 0.2 percent at 3,263.97.
The modest strength on Wall Street comes as traders remain optimistic about the economic outlook despite the recent surge in new coronavirus cases.
Adding to the optimism, the National Association of Realtors released a report showing existing home sales rebounded at a record pace in June after three straight months of declines.
NAR said existing home sales spiked by 20.7 percent to an annual rate of 4.72 million in June after plunging by 9.7 percent to a rate of 3.91 million in May. Economists had expected sales to skyrocket by about 24.5 percent.
“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist.
He added, “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
The unrelenting economic optimism has overshadowed concerns about the coronavirus even though President Donald Trump warned on Tuesday that the pandemic “will probably, unfortunately, get worse before it gets better.”
With new cases spiking, the U.S. government placed an initial order for 100 million doses of the COVID-19 vaccine candidate jointly developed by Pfizer (PFE) and BioNTech (BNTX) for $1.95 billion and can acquire up to 500 million additional doses.
Housing stocks continue to see substantial strength following the upbeat existing home sales data, with the Philadelphia Housing Sector Index surging up by 2.9 percent to a four-month intraday high.
Significant strength also remains visible among gold stocks, although they have pulled back off their best levels of the day. The NYSE Arca Gold Bugs Index is up by 1.3 percent after reaching its best intraday level in over seven years.
The strength in the gold sector comes amid a sharp increase by the price of the precious metal, as gold for August delivery is jumping $18.30 to $1,862.20 an ounce.
Commercial real estate stocks have also shown a strong move to the upside, driving the Dow Jones U.S. Real Estate Index up by 1.2 percent.
On the other hand, energy stocks continue see considerable weakness following the rally seen in the previous session. The pullback comes as crude for September delivery is falling $0.60 to $41.32 a barrel.
Reflecting the weakness in the energy sector, the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index are both down by 2 percent and the Philadelphia Oil Service Index is down by 1.6 percent.
Banking stocks have climbed off their worst levels of the day but also continue to see notable weakness, with the KBW Bank Index down by 1.2 percent.
In overseas trading, most stock markets across the Asia-Pacific region moved lower on Wednesday, although China’s Shanghai Composite Index bucked the downtrend and rose by 0.4 percent. Japan’s Nikkei 225 Index fell by 0.6 percent, while Hong Kong’s Hang Seng Index plunged by 2.3 percent.
The major European markets also moved to the downside on the day. While the French CAC 40 Index tumbled by 1.3 percent, the U.K.’s FTSE 100 Index slumped by 1 percent and the German DAX Index slid by 0.5 percent.
In the bond market, treasuries continue to see modest strength after moving higher early in the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 0.589 percent.
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