Stocks Finish Choppy Trading Session Mostly Higher - U.S. Commentary

(RTTNews) - After failing to sustain an early move to the upside, stocks fluctuated over the course of the trading day on Wednesday. The major averages bounced back and forth across the unchanged line before eventually ending the session in positive territory.

While the major averages all closed higher, the tech-heavy Nasdaq outperformed its counterparts. The Nasdaq advanced 40.59 points or 0.8 percent to 4,950.82, while the Dow edged up 27.09 points or 0.2 percent to 17,902.51 and the S&P 500 rose 5.5 points or 0.3 percent to 2,081.90.

The choppy trading seen throughout the session came as traders waited on and then reacted to the minutes of the Federal Reserve's March meeting, which indicated that officials are divided over when to begin raising interest rates.

The minutes showed that several participants determined that the economic data and outlook were likely to warrant beginning the process of raising rates in June.

However, others said conditions would not be appropriate to begin raising rates until later in the year due to the effects lower energy prices and the dollar's appreciation have on inflation.

The Fed noted that a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The labor market data will play the key role in determining the exact liftoff date."

"If we are right and employment growth rebounds in April and May, then a June rate hike might not be out of the question," he added. "Beyond that, we suspect that the pace of rate hikes will depend a lot on the reaction in financial markets."

Traders were looking ahead to the release of quarterly results from Alcoa (AA) after the close of trading, as the release of results from the aluminum giant is seen as the unofficial start of earnings season.

Analysts expect Alcoa to report first quarter earnings of $0.26 per share on revenues of $5.94 billion. A year ago, the company reported adjusted earnings of $0.09 per share on revenues of $5.45 billion.

Sector News

While many of the major sectors ended the day showing only modest moves, considerable strength was visible among airline stocks. The NYSE Arca Airline Index surged up by 2.4 percent, climbing further off the three-month closing low it set on Monday.

Delta (DAL), JetBlue (JBLU), and Southwest (LUV) turned in some of the airline sector's best performances on the day.

Biotechnology stocks also saw significant strength, driving the NYSE Arca Biotechnology Index up by 1.7 percent. Nektar Therapeutics (NKTR) and Myriad Genetics (MYGN) posted standout gains.

Meanwhile, natural gas stocks came under pressure on the day, with the NYSE Arca Natural Gas Index falling by 1.5 percent after ending the previous session at its best closing level in over a month.

The weakness among natural gas stocks came as the price of natural gas for May delivery fell $0.061 to $2.619 per million BTUs. Gold stocks also moved lower along with the price of the precious metal, resulting in a 1.4 percent drop by the NYSE Arca Gold Bugs Index.

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 0.8 percent, while Hong Kong's Hang Seng Index surged up by 3.8 percent following a long Easter break.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index dropped by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index fell by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries saw considerable volatility over the course of the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.895 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to Alcoa's quarterly results, which could set the tone for the rest of earnings season.

Following several quiet days on the U.S. economic front, traders are also likely to keep an eye on reports on weekly jobless claims and wholesale inventories.