Stocks Close Modestly Higher Amid Increase In Oil Prices - U.S. Commentary

(RTTNews) - After ending the previous session mixed, stocks saw modest strength during trading on Wednesday. With the gains on the day, the S&P 500 reached its highest closing level in well over ten months.

The major averages moved roughly sideways going into the close, holding on to slim gains. The Dow climbed 66.77 points or 0.4 percent to 18,005.05, the Nasdaq edged up 12.89 points or 0.3 percent to 4,974.63 and the S&P 500 rose 6.99 points or 0.3 percent to 2,119.12.

The modest strength on Wall Street was partly due to a continued increase by the price of crude oil, which closed above $51 a barrel for the first time since last July.

Crude oil for July delivery is climbed $0.87 to $51.23 a barrel after rising $0.67 to $50.36 a barrel on Tuesday.

The Energy Information Administration released a report this morning showing a bigger than expected decrease in crude oil inventories in the week ended June 3rd.

The report said that crude oil stockpiles fell by 3.2 million barrels compared to economist estimates for a drop of 2.7 million barrels.

Nonetheless, overall trading activity remained relatively light amid the lack of more significant U.S. economic data on the day.

Traders stuck to the sidelines ahead of the Federal Reserve's monetary policy announcement scheduled for next Wednesday.

Recent data seems to have eliminated the possibility that the Fed will raise interest rates, but traders are likely to keep a close eye on the central bank's accompanying statement.

Sector News

Steel stocks showed a substantial move to the upside, resulting in a 4.1 percent jump by the NYSE Arca Steel Index. With the gain, the index reached its best closing level in over a month.

Brazil's CSN (SID), AK Steel (AKS), and U.S. Steel (X) turned in some of the steel sector's best performances on the day.

Considerable strength was also visible among gold stocks, as reflected by the 3.3 percent gain posted by the NYSE Arca Gold Bugs Index. The index also reached its highest closing level in over a month.

The strength among gold stocks came amid a notable increase by the price of the precious metal, with gold for August delivery surging up $15.30 to $1,262.30 an ounce.

Railroad and oil service stocks also saw significant strength on the day, while weakness was visible among natural gas stocks.

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 advanced by 0.9 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index fell by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries showed a lack of direction throughout much of the session before closing slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.706 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to U.S. reports on weekly jobless claims and wholesale inventories.