Energy Sector Rally Contributes To Strength On Wall Street - U.S. Commentary

(RTTNews) - After turning in a mixed performance in the previous session, stocks moved mostly higher over the course of the trading day on Wednesday. With the gains, the major averages ended the session at their best closing levels in almost a month.

The major averages gave back some ground going into the close, but remained firmly positive. The Dow rose 75.91 points or 0.4 percent to 18,112.61, the Nasdaq advanced 33.73 points or 0.7 percent to 5,011.02 and the S&P 500 climbed 10.79 points or 0.5 percent to 2,106.63.

The strength shown by the broader markets was partly due to a rally by energy stocks, which benefited from a substantial increase by the price of crude oil.

After jumping $1.38 to $53.29 a barrel on Tuesday, crude oil for May delivery soared $3.10 to $56.39 a barrel, the highest close of the year.

Within the energy sector, oil service stocks once again posted particularly strong gains, driving the Philadelphia Oil Service Index up by 4 percent to its best closing level in well over four months.

Gold stocks also saw considerable strength on the day, moving higher along with the price of the precious metal. With gold for June delivery climbing $8.70 to $1,201.30 an ounce, the NYSE Arca Gold Bugs Index surged up by 3.4 percent.

Semiconductor, computer hardware, and software stocks also moved notably higher, reflecting strength in the broader tech sector.

The gains by tech stocks were partly led by Intel (INTC), with the semiconductor giant jumping by 4.3 percent on the day.

After the close of trading on Tuesday, Intel reported first quarter earnings that came in line with analyst estimates, although its revenues came in below expectations.

While Intel also provided lackluster revenue guidance for the second quarter, it forecast better than expected profit margins for the quarter.

Delta Air Lines (DAL) also showed a strong upward move after reporting first quarter earnings that came in slightly above expectations.

On the other hand, financial giant Bank of America (BAC) moved to the downside even after reporting a first quarter profit compared to a year-ago loss.

Traders were also digesting a mixed batch of economic data, including reports showing a bigger than expected rebound in homebuilder confidence but a bigger than expected drop in industrial production.

The National Association of Home Builders released a report showing a notable rebound in homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index jumped to 56 in April from a nine-month low of 52 in March. Economists had been expecting the index to climb to 55.

Meanwhile, the Federal Reserve released a report showing that industrial production fell by 0.6 percent in March after inching up by 0.1 percent in February. Economists had expected production to drop by 0.3 percent.

A separate report from the New York Fed also showed an unexpected contraction in regional manufacturing activity in the month of April.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index edged down by 0.2 percent, while Hong Kong's Hang Seng Index inched up by 0.2 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index closed only just above the unchanged line, the U.K.'s FTSE 100 Index rose by 0.3 percent and the French CAC 40 Index advanced by 0.7 percent.

In the bond market, treasuries ended the session roughly flat after failing to sustain an early upward move. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by less than a basis point to 1.90 percent.

Looking Ahead

Another batch of economic data may be in focus on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, housing starts, and Philadelphia-area manufacturing activity.

Speeches by several Fed officials may also attract attention amid ongoing uncertainty about the outlook for interest rates.

On the earnings front, Citigroup (C), Goldman Sachs (GS), and UnitedHealth (UNH) are among the companies due to report their quarterly results before the start of trading on Thursday.