U.S. Stocks Move Sharply Higher As Oil Prices, Treasury Yields Spike

(RTTNews) - Stocks moved sharply higher during trading on Wednesday, offsetting the steep drop seen in the previous session. The major averages all showed substantial moves back to the upside on the day.

The major averages held on to strong gains going into the close. The Dow shot 596.40 points or 1.8 percent at 33,891.35, the Nasdaq jumped 219.56 points or 1.6 percent to 13,752.02 and the S&P 500 spiked 80.28 points or 1.9 percent to 4,386.54.

The strength on Wall Street came as the price of crude oil continued to surge, jumping to its highest levels in eleven years.

After reaching an intraday high of $112.51 a barrel, the highest level since May 2011, crude for April delivery gave back some ground but still soared $7.19 to $110.60 a barrel.

Energy stocks benefitted from the spike in oil prices, which came amid the ongoing war in Ukraine and OPEC's decision to stick with plans for a modest increase in output.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 4.4 percent, while the NYSE Arca Oil Index jumped by 2.1 percent.

Substantial strength was also visible among computer hardware stocks, as reflected by the 4.4 percent spike by the NYSE Arca Computer Hardware Index.

Hewlett Packard Enterprise (HPE) helped lead the sector higher after reporting better than expected quarterly earnings.

A rebound by treasury yields also contributed to significant strength among banking stocks, with the KBW Bank Index shooting up by 3.6 percent after ending the previous session at a five-month closing low.

Steel, semiconductor, networking and transportation stocks also moved notably higher, while gold stocks bucked the uptrend amid a steep drop by the price of the precious metal.

On the U.S. economic front, payroll processor ADP released a report showing U.S. private sector employment jumped by much more than expected in the month of February.

ADP said private sector employment surged by 475,000 jobs in February compared to economist estimates for an increase of 388,000 jobs.

The report also showed a substantial revision to the January data, with the revised data showing employment spiked by 509,000 jobs compared to the previously reported loss of 301,000 jobs.

Meanwhile, Federal Reserve Chair Jerome Powell told the House Financial Services Committee the Fed still believes it will be appropriate to raise interest rates later this month, citing inflation well above 2 percent and a strong labor market.

The likely increase in interest rates comes even though Powell acknowledged that the Russia-Ukraine conflict has introduced significant uncertainty for the U.S. economic outlook.

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 slumped by 1.7 percent, while Australia's S&P/ASX 200 Index rose by 0.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index advanced by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index jumped by 1.4 percent and 1.6 percent, respectively.

In the bond market, treasuries saw a significant pullback after moving sharply higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, spiked 15.8 basis points to 1.865 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims, factory orders and service sector activity, while traders are also likely to keep an eye on the latest developments in Ukraine.