U.S. Stocks Showing Significant Move Back To The Upside
After moving modestly higher early in the session, stocks have seen considerable further upside over the course of the trading day on Wednesday. The major averages have more than offset the losses posted in the previous session, with the Nasdaq reaching its best intraday level in well over eight months.
In recent trading, the major averages have once again reached new highs for the session. The Dow is up 433.55 points or 1.3 percent at 33,445.69, the Nasdaq is up 158.63 points or 1.3 percent at 12,501.68 and the S&P 500 is up 51.86 points or 1.3 percent at 4,161.76.
The rebound on Wall Street partly reflects optimism lawmakers will eventually reach an agreement on raising the U.S. debt ceiling following yesterday’s meeting between President Joe Biden and top congressional leaders.
A statement from the White House described the meeting as “productive” and said Biden is “optimistic that there is a path to a responsible, bipartisan budget agreement.”
Biden directed staff to continue to meet daily on outstanding issues, with the president cutting short an upcoming overseas trip to ensure Congress takes action by the June 1st deadline to avert default.
House Speaker Kevin McCarthy, R-Calif., told reporters following the meeting that the two sides remain “far apart” but said it is “possible to get a deal by the end of the week.”
Regional banks have helped lead the rebound on Wall Street, with shares of Western Alliance (WAL) spiking by 13.7 percent after the company said deposit growth for the current quarter exceeded $2 billion as of May 12.
In U.S. economic news, the Commerce Department released a report unexpectedly showing a significant rebound in new residential construction in the month of April.
The report said housing starts jumped by 2.2 percent to an annual rate of 1.401 million in April after plunging by 4.5 percent to a revised rate of 1.371 million in March.
Economists had expected housing starts to drop to an annual rate of 1.405 million from the 1.420 million originally reported for the previous month.
Meanwhile, the Commerce Department said building permits slumped by 1.5 percent to an annual rate of 1.416 million in April after tumbling by 3.0 percent to a revised rate of 1.437 million in March.
Building permits, an indicator of future housing demand, were expected to climb to a rate of 1.430 million from the 1.413 million originally reported for the previous month.
Airline stocks continue to see substantial strength in afternoon trading, with the NYSE Arca Airline Index soaring by 5.2 percent to a two-month intraday high.
As mentioned above, considerable strength also remains visible among banking stocks, as reflected by the 4.8 percent surge by the KBW Bank Index.
Steel stocks also continue to see significant strength, driving the NYSE Arca Steel Index up by 3.3 percent. The index is bouncing off its lowest closing level in almost five months.
Energy, semiconductor, computer hardware and networking stocks are also seeing notable strength, while gold stocks have moved 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 climbed by 0.8 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.
The major European markets also finished the day mixed. While the German DAX Index rose by 0.3 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.’s FTSE 100 Index fell by 0.4 percent.
In the bond market, treasuries have turned lower over the course of the session after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its prices, is up by 2.6 basis points at 3.575 percent.
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