Nasdaq, S&P 500 Reach Record Closing Highs Amid Continued Rally On Wall Street

(RTTNews) - Stocks showed a strong upward move during trading on Wednesday, extending the rally seen over the course of the two previous sessions. With the continued advance on the day, the Nasdaq and the S&P 500 ended the session at new record closing highs.

The major averages all closed in positive territory, although the Nasdaq posted a more modest gain. While the Nasdaq rose 40.71 points or 0.4 percent to 9,508.68, the Dow surged up 483.22 points or 1.7 percent to 29,290.85 and the S&P 500 jumped 37.10 points or 1.1 percent to 3,334.69.

The continued strength on Wall Street came on the heels of reports of breakthroughs in the developments of treatments for the coronavirus.

A report from Reuters noted traders are pointing to a Chinese TV report indicating a research team at Zhejiang University has found an effective drug to treat people with the new virus.

Sky News also reported that a leading British scientist has made a significant breakthrough in the race for a coronavirus vaccine by reducing a part of the normal development time from "two to three years to just 14 days."

Traders seemed to ignore the response to the reports by the World Health Organization, which stated there are "no known" treatments against the virus.

"There are no known effective therapeutics against this 2019-nCoV and WHO recommends enrollment into a randomized controlled trial to test efficacy and safety," the WHO said in a statement.

The agency added, "A master global clinical trial protocol for research and prioritization of therapeutics is ongoing at the WHO."

Adding to the positive sentiment, payroll processor ADP released a report showing much stronger than expected private sector job growth in the month of January.

ADP said private sector employment soared by 291,000 jobs in January after jumping by a revised 199,000 jobs in December.

Economists had expected employment to increase by about 156,000 jobs compared to the addition of 202,000 jobs originally reported for the previous month.

"Mild winter weather provided a significant boost to the January employment gain," said Mark Zandi, chief economist of Moody's Analytics.

He added, "The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs."

The Institute for Supply Management also released a report showing a faster rate of growth in U.S. service sector activity in the month of January.

The ISM said its non-manufacturing index rose to 55.5 in January from a revised 54.9 in December, with a reading above 50 indicating service sector growth.

Economists had expected the non-manufacturing index to inch up to 55.1 from the 55.0 originally reported for the previous month.

Meanwhile, a separate report released by the Commerce Department showed the U.S. trade deficit widened in December amid a jump in the value of imports.

A sharp pullback by shares of Tesla (TSLA) limited the upside for the tech-heavy Nasdaq, with the electric car maker plunging by 17.1 percent after soaring to a new record high in the previous session.

Sector News

Energy stocks showed a substantial move to the upside on the day, benefiting from a rebound by the price of crude oil.

Crude for March delivery jumped $1.14 to $50.75 a barrel after closing below $50 a barrel for the first time in over a year on Tuesday.

Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index spiked by 4.6 percent, the Philadelphia Oil Service Index soared by 4.1 percent and the NYSE Arca Oil Index surged up by 3.6 percent.

Significant strength was also visible among biotechnology stocks, as reflected by the 2.6 percent jump by the NYSE Arca Biotechnology Index.

Banking, housing and semiconductor stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index advanced by 1 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

The major European markets also moved to the upside on the day. While the German DAX Index surged up by 1.5 percent, the French CAC 40 Index climbed by 0.9 percent and the U.K.'s FTSE 100 Index rose by 0.6 percent.

In the bond market, treasuries extended the notable downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.6 basis points to 1.649 percent.

Looking Ahead

Reports on weekly jobless claims and labor productivity may attract attention on Thursday, although trading activity may be somewhat subdued ahead of the release of more closely watched monthly jobs report on Friday.

On the earnings front, Adtran (ADTN), GoPro (GPRO), GrubHub (GRUB), MetLife (MET), and Qualcomm (QCOM) are among the companies releasing their quarterly results after the close of today's trading.

Bristol-Myers (BMY), Dunkin (DNKN), Kellogg (K), Twitter (TWTR) and Yum! Brands (YUM) are also among the companies due to report their results before the start of trading on Thursday.