Stocks Close Firmly Positive Following Fed Minutes - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Wednesday, partly offsetting the pullback seen over the two previous sessions. The tech-heavy Nasdaq posted a standout gain, climbing to a three-month closing high.

The major averages saw further upside going into the close, ending the session just off their best levels of the day. The Dow climbed 112.73 points or 0.6 percent to 17,716.05, the Nasdaq soared 76.78 points or 1.6 percent to 4,920.72 and the S&P 500 jumped 21.49 points or 1.1 percent to 2,066.66.

The strength on Wall Street was partly due to a notable increase by the price of crude oil, with crude for May delivery jumping $1.86 to $37.75 a barrel.

The sharp increase by the price of oil came after a report from the Energy Information Administration showed that crude oil inventories fell by 4.9 million barrels last week.

In afternoon trading, stocks fluctuated following the release of the minutes of the Federal Reserve's latest monetary policy meeting but managed to remain mostly positive.

The minutes revealed that Fed officials discussed the possibility of raising interest rates at the next meeting later this month.

While several officials expressed concern that raising rates in April would signal a sense of urgency they did not think appropriate, other indicated that a rate hike might well be warranted if incoming economic data remained consistent with their expectations.

Chris Low, chief economist at FTN Financial, said, "The decision to avoid hinting at an increased possibility of a hike at the next meeting suggests the doves dominated this discussion."

"Still, the failure to downgrade the balance of risks suggest it was not a complete rout," he added. "The hawks still have influence."

The central bank's revised forecast for interest rates released after the meeting showed that officials expect two rate hikes by the end of this year compared to the four predicted back in December.

Sector News

Biotechnology stocks showed a substantial move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 5.9 percent. With the jump, the index extended a recent upward trend, reaching its highest closing level in well over two months.

Agios Pharmaceuticals (AGIO), Celldex Therapeutics (CLDX), and Incyte (INCY) turned in some of the biotech sector's best performances.

Significant strength was also visible among pharmaceutical stocks, as reflected by the 3 percent gain posted by the NYSE Arca Pharmaceutical Index. The index also ended the session at a two-month closing high.

Energy stocks also saw considerable strength on the day, benefiting from the sharp increase by the price of crude oil.

Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index jumped by 2.2 percent, the NYSE Arca Oil & Gas Index surged up by 2 percent and the Philadelphia Oil Service Index advanced by 1.7 percent.

Tobacco, internet, networking, and housing stocks also turned in strong performances, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index crept up by 0.2 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index surged up by 1.2 percent, the French CAC 40 Index and the German DAX Index climbed by 0.8 percent and 0.6 percent, respectively.

In the bond market, treasuries gave back some ground after trending higher in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 1.755 percent.

Looking Ahead

The economic calendar remains relatively quiet on Thursday, although the Labor Department is due to release its report on weekly jobless claims.