U.S. Stocks Off Best Levels But Still Firmly Positive Ahead Of Fed Announcement
Stocks have pulled back off their best levels of the day but continue to see significant strength in afternoon trading on Tuesday. With the upward move, the major averages are adding to the strong gains posted in the previous session.
Currently, the major averages are well off their highs but remain firmly positive. The Dow is up 260.91 points or 0.8 percent at 33,805.25, the Nasdaq is up 269.43 points or 2.1 percent at 13,218.06 and the S&P 500 is up 50.62 points or 1.2 percent at 4,313.07.
Bargain hunting contributed to early strength on Wall Street, as stocks remained at relatively reduced levels even after the rebound seen on Tuesday.
The Nasdaq continues to outperform its counterparts after the index ended Monday’s trading at its lowest closing level in over a year.
Optimism about a potential diplomatic solution to the ongoing Russia-Ukraine conflict also generated additional buying interest.
Ukrainian President Volodymyr Zelenskyy said during an address to the nation that the positions in the negotiations were beginning to “sound more realistic,” while Russian Foreign Minister Sergey Lavrov told the BBC there was “some hope of reaching a compromise.”
Indications China is willing to provide more support for the slowing economy also helped ease concerns about the global economic outlook.
Buying interest has waned somewhat over the course of the session, however, as traders await the Federal Reserve’s impending monetary policy announcement.
With the Fed widely expected to raise interest rates by 25 basis points, traders will pay close attention to the accompanying statement for clues about future rate hikes.
On the U.S. economic front, the Commerce Department released a report showing a modest increase in retail sales in the month of February.
Brokerage stocks have moved sharply higher over the course of the trading session, resulting in a 4.1 percent spike by the NYSE Arca Broker/Dealer Index.
Substantial strength also remains visible among airline stocks, as reflected by the 3.5 percent jump by the NYSE Arca Airline Index.
Semiconductor stocks also continue to turn in a strong performance on the day, with the Philadelphia Semiconductor Index surging up by 2.9 percent.
Chipmaker Micron Technology (MU) has helped to lead the sector higher after Bernstein upgraded its rating on the company’s stock to Outperform from Underperform.
Banking, tobacco, and steel stocks also seeing considerable strength in afternoon trading, 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 sharply higher during trading on Wednesday. Japan’s Nikkei 225 Index jumped by 1.6 percent, China’s Shanghai Composite Index spiked by 3.5 percent and Hong Kong’s Hang Seng Index skyrocketed by 9.1 percent.
The major European markets also showed substantial moves to the upside on the day. While the U.K.’s FTSE 100 Index shot up by 1.6 percent, the French CAC 40 Index and the German DAX Index surged by 3.7 percent and 3.8 percent, respectively.
In the bond market, treasuries are seeing modest weakness ahead of the Fed’s monetary policy announcement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.1 basis points at 2.171 percent.
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