Stocks were holding onto modest gains Wednesday following a deluge of economic data seen as bullish enough to provide the Federal Reserve with the necessary ammunition to raise interest rates in December. Other than the University of Michigan consumer sentiment index and a separate report on personal spending, all of Wednesday's economic data either met or beat analyst expectations, including a 3.0% increase in durable goods orders during October - double the rise Wall Street had been expecting.
Healthcare stocks were outperforming today with Dow component Pfizer ( PFE ) climbing more than 3%, with a SunTrust upgrade outweighing disappointing trial results for the company's Lyrica pain medication, which came up short of expectations as a potential treatment for traumatic neuropathic pain.
Stocks are holding onto modest gains as a deluge of economic data was bullish enough to give the Federal Reserve ammunition to raise interest rates in December. With the exception of the University of Michigan consumer sentiment index and personal spending, all of Wednesday's economic data met or beat analyst's expectations, namely October durable goods orders which rose 3.0%, twice the increase Wall Street expected.
Healthcare stocks are outperforming with Dow component stock Pfizer up more than 3% as an upgrade by SunTrust outweighs disappointing results from the company's Lyrica pain medication which failed to meet expectations as a treatment for traumatic neuropathic pain. But losers were beating out winners on the S&P 500, with utilities pressured by expectations for higher U.S. rates while profit-taking was working to trim some of Tuesday's impressive gains for shares of energy companies.
A week's worth of data was crammed into the morning session starting with initial jobless claims, which fell by 11,000 to 260,000 first-time applicants, beating expectations for a 1,000 drop to 270,000. Orders for products expected to last more than three years, excluding transportation items, increased 0.5%, edging out the 0.4% estimate. Personal income grew an as-expected 0.4% during October but personal consumption spending rose just 0.1%, missing the Street view looking for a 0.3% rise.
The second round of economic news included the Federal Housing Finance Agency house price index increasing a much better-than-expected 0.8% in September while new home sales climbed 10% year-over-year to a seasonally-adjusted annual rate of 495,000. The Purchasing Manager's service index flash reading jumped to 56.5 during November from the 54.8 reading last month and beating the 55.0 forecast estimate. Also, the University of Michigan consumer sentiment index rose to a 91.3 final reading during November from 90.0 last month but was down from November's preliminary read of 93.1.
European equities finished significantly higher in reaction to a Reuters report citing several anonymous members of the European Central Bank and saying additional stimulus measures are being discussed for next month's policy meeting. Those efforts could include expanding the ECB's current bond-buying program as well as imposing penalties on euro-zone banks that hoard cash rather than lending it.
Crude oil was down 48 cents to $42.38 per barrel. Natural gas was unchanged at $2.33 per 1 million BTU. Gold was down $2.80 to $1,071.10 per ounce, while silver was down 6 cents to $14.13 per ounce. Copper was down 2 cents to $2.05 per pound.
Among energy ETFs, the United States Oil Fund was down 1.09% to $13.18 with the United States Natural Gas Fund was up 0.17% to $9.07. Among precious-metal funds, the Market Vectors Gold Miners ETF was unchanged at 21.56 while SPDR Gold Shares were down 0.33% to $102.60. The iShares Silver Trust was down 0.12% to $13.49.
Here's where the U.S. markets stood at mid-day:
NYSE Composite Index up 17.10 (+0.16%) to 10,466.82
Dow Jones Industrial Average up 34.84 (+0.20%) to 17,847.03
S&P 500 up 3.11 (+0.15%) to 2,092.25
Nasdaq Composite Index up 18.92 (+0.37%) to 5,121.72
Nikkei 225 Index down 0.39%
Hang Seng Index down 0.40%
Shanghai China Composite Index up 0.88%
FTSE 100 Index up 0.96%
CAC 40 up 1.51%
DAX up 2.15%
NYSE SECTOR INDICES
NYSE Energy Sector Index down 0.07%
NYSE Financial Sector Index up 0.04%
NYSE Healthcare Sector Index up 0.73%
(+) CACC (+14.60%) Board approves 1 million share buyback
(+) NCTY (+11.69%) Qihoo 360 Technology ( QIHU ) and The9 Limited JV signs license deal with Smilegate Entertainment to publish and operate Cross Fire 2
(+) ACAS (+8.45%) To consider strategic alternatives, increase share buyback program
(+) DE (+3.79%) Q4 EPS and revenue dropped from Q4 2014 but beat street estimates
(-) ABGB (-53.12%) Received notice from Gonvarri Corporacin that a framework agreement was terminated, and Gonvarri will not invest $371 million into Abengoa
(-) QADA (-14.27%) Reported mixed fiscal Q3 results and reduced its 2016 guidance
(-) SUNE (-14.08%) Downgraded at UBS to sell from neutral
(-) HPQ (-13.80%) Earnings drop from year ago levels on lower revenue, miss expectations
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