U.S. Stocks Move Back To The Upside Following Powell Testimony

(RTTNews) - Following a notable pullback to start the week, stocks moved mostly higher during trading on Wednesday. The major averages all moved to the upside on the day but remain well off their recent record highs.

The major averages finished the day off their highs of the session but still in positive territory. The Nasdaq climbed 91.95 points or 0.6 percent to 16,031.54, the S&P 500 rose 26.1 points or 0.5 percent to 5,104.76 and the Dow edged up 75.86 points or 0.2 percent to 38,661.05.

The rebound on Wall Street partly reflected a positive reaction to congressional testimony by Federal Reserve Chair Jerome Powell.

Powell told the House Financial Services Committee it will likely be appropriate for the Fed to begin lowering interest rates at "some point this year," although he reiterated officials need "greater confidence" inflation is moving sustainably toward 2 percent.

The Fed Chief described the economic outlook as "uncertain" and said progress towards the Fed's 2 percent inflation objective is "not assured."

"Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2 percent," Powell said.

He added, "At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment."

Powell said future interest rate decisions will be based on careful assessment of the incoming data, the evolving outlook, and the balance of risks.

Meanwhile, a report released by payroll processor ADP showed private sector employment in the U.S. increased by slightly less than expected in the month of February.

ADP said private sector employment rose by 140,000 jobs in February after climbing by an upwardly revised 111,000 jobs in January.

Economists had expected private sector employment to grow by 150,000 jobs compared to the addition of 107,000 jobs originally reported for the previous month.

Sector News

Semiconductor stocks turned in a strong performance on the day, with the Philadelphia Semiconductor Index surging by 2.4 percent to a record closing high.

Considerable strength was also visible among computer hardware stocks, as reflected by the 1.8 percent jump by the NYSE Arca Computer Hardware Index. The index also reached a record closing high.

Gold stocks also saw significant strength amid an increase by the price of the precious metal, resulting in a 1.8 percent gain by the NYSE Arca Gold Bugs Index.

Airline and networking stocks also moved to the upside on the day, while banking stocks gave back ground after turning in a strong performance on Tuesday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Hong Kong's Hang Seng Index jumped by 1.7 percent, while Japan's Nikkei 225 Index edged slightly lower and China's Shanghai Composite Index fell by 0.3 percent.

Meanwhile, the major European markets all moved modestly higher on the day. While the U.K.'s FTSE 100 Index climbed by 0.4 percent, the French CAC 40 Index rose by 0.3 percent and the German DAX Index inched up by 0.1 percent.

In the bond market, treasuries extended the strong upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.3 basis points to a one-month closing low of 4.104 percent.

Looking Ahead

Powell is due to deliver his second day of testimony on Capitol Hill on Thursday, while reports on weekly jobless claims and the U.S. trade deficit may also impact trading.