U.S. Stocks Show Significant Rebound After Seeing Early Weakness
(RTTNews) - After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Wednesday. The rebound reflected a reversal from the previous session, when stocks turned lower after seeing initial strength.
The major averages all climbed firmly into positive territory, with the Dow outperforming its counterparts. While the Dow jumped 258.20 points or 1 percent to 26,036.10, the Nasdaq rose 29.94 points or 0.4 percent to 7,856.88 and the S&P 500 climbed 18.78 points or 0.7 percent to 2,887.94.
Energy stocks helped to lead the markets back to the upside, benefiting from a notable increase by the price of crude oil.
Crude for October delivery pulled back off its highs of the session but still climbed $0.85 to $55.78 a barrel following the release of a report showing a steep weekly drop in crude oil inventories.
The report from the Energy Information Administration said crude oil inventories tumbled by 10.0 million barrels in the week ended August 23rd compared to estimates for a decrease of 2.1 million barrels.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 3.6 percent, the NYSE Arca Natural Gas Index surged up by 2.4 percent and the NYSE Arca Oil Index advanced by 1.7 percent.
Significant strength also emerged among transportation stocks, as reflected by the 1.8 percent jump by the Dow Jones Transportation Average.
Steel, financial, and networking stocks also showed notable moves to the upside on the day, moving higher along with most of the other major sectors.
The rebound on Wall Street also came as bond yields climbed off their worst levels of the session, although they remained negative.
Earlier in the day, the negative spread between the ten-year and two-year yields widened to its lowest level since 2007, with an inverted yield curve widely seen as an indicator that a U.S. recession is looming.
The White House has sought to downplay recession concerns, although the inverted yield curve combined with the escalating U.S.-China trade war have generated considerable uncertainty on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while China's Shanghai Composite Index dipped by 0.3 percent.
The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index both fell by 0.3 percent.
In the bond market, treasuries extended the notable upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.4 basis points to 1.466 percent.
Following a quiet day on the U.S. economic front, trading on Thursday may be impacted by reaction to a revised reading on second quarter GDP as well as reports on weekly jobless claims and pending home sales.
On the earnings front, retailers Abercrombie & Fitch (ANF), Best Buy (BBY), Dollar General (DG) and Dollar Tree (DLTR) are among the companies due to report their quarterly results before the start of trading on Thursday.