Stocks Close Mostly Higher But Well Off Best Levels - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading day on Wednesday but managed to maintain a positive bias throughout the session. With the gains, the major averages all ended the session at their best closing levels in about three months.

The major averages finished the day firmly in positive territory but well off their highs of the session. The Dow climbed 83.55 points or 0.5 percent to 17,716.66, the Nasdaq advanced 22.67 points or 0.5 percent to 4,869.29 and the S&P 500 rose 8.94 points or 0.4 percent to 2,063.95.

The higher close on Wall Street came as traders continued to react positively to yesterday's remarks by Federal Reserve Chair Janet Yellen, which were seen as dovish regarding the outlook for interest rates.

In a speech to the Economic Club of New York, Yellen said she considers it appropriate for the Fed to proceed cautiously in adjusting monetary policy given the risks to the economic outlook.

The speech largely offset a recent uptick in speculation that the Fed will raise interest rates at its next meeting toward the end of April.

Positive sentiment was also generated by the release of a report from payroll processor ADP showing slightly stronger than expected U.S. private sector job growth in the month of March.

ADP said private sector employment increased by 200,000 jobs in March after jumping by a downwardly revised 205,000 jobs in February. Economists had expected employment to climb by about 195,000 jobs.

Friday morning, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both private and public sector jobs.

Jay Morelock, an economist at FTN Financial, said, "After Chair Yellen dampened expectations of a Fed move in April, all eyes turn to Friday's employment report to gauge whether the Fed will lean toward June or push the next rate hike into the second half of the year."

The fluctuations shown by stocks over the course of the trading day were partly due to volatility by the price of crude oil.

Crude for May delivery eventually ended the session up $0.04 at $38.32, well off its intraday high of $39.85 a barrel.

Sector News

Steel stocks saw significant strength throughout the trading session, resulting in a 2.1 percent jump by the NYSE Arca Steel Index. With the gain, the index ended the session at its best closing level in well over five months.

Within the steel sector, Brazil's Gerdau (GGB) posted a standout gain after Bank of America Merrill Lynch raised its rating on the stock to Buy from Underperform.

Considerable strength was also visible among railroad stocks, as reflected by the 1.3 percent gain posted by the Dow Jones Railroads Index. Norfolk Southern (NSC) and Canadian Pacific (CP) turned in two of the sector's best performances.

Oil service, tobacco, and semiconductor stocks also saw notable strength on the day, while gold stocks pulled back along with the price of the precious metal.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region moved higher on Wednesday. Hong Kong's Hang Seng Index and China's Shanghai Composite Index surged up by 2.2 percent and 2.8 percent, respectively. However, Japan's Nikkei 225 Index bucked the uptrend and slid by 1.3 percent.

Meanwhile, the major European markets all showed strong moves to the upside on the day. While the French CAC 40 Index jumped by 1.8 percent, the U.K.'s FTSE 100 Index and the German DAX Index both spiked by 1.6 percent.

In the bond market, treasuries gave back some ground after ending the previous session notably higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.6 basis points to 1.83 percent.

Looking Ahead

Reports on weekly jobless claims and Chicago-area business activity may attract some attention on Thursday, although trading activity is likely to be somewhat subdued ahead of Friday's jobs report.