U.S. Stocks Sharply Higher As Fed Announcement Looms

(RTTNews) - After moving notably higher early in the session, stocks continue to see significant strength in early afternoon trading on Wednesday. The major averages have all shown strong moves to the upside after ending the previous session narrowly mixed.

Currently, the major averages are off their highs of the session but still firmly positive. The Dow is up 442.49 points or 1.3 percent at 34,362.33, the Nasdaq is up 157.60 points or 1.1 percent at 14,903.99 and the S&P 500 is up 52.32 points or 1.2 percent at 4,406.51.

The rally on Wall Street comes as traders pick up stocks at reduced levels following the slump seen during the month of September.

With the upward move on the day, the Dow is bouncing off its lowest closing level in three months, while the S&P 500 is rebounding from a two-month closing low.

Meanwhile, traders are also looking ahead to the Federal Reserve's monetary policy announcement due at 2 pm ET.

The Fed is widely expected to leave monetary policy unchanged but could provide guidance for its plans to begin scaling back its asset purchases.

The central bank previously signaled it could start tapering by the end of the year, although some disappointing economic data could lead the Fed to push back its plans.

On the U.S. economic front, the National Association of Realtors released a report showing a pullback by U.S. existing home sales in the month of August.

NAR said existing home sales slumped by 2.0 percent to an annual rate of 5.88 million in August after jumping by 2.2 percent to a revised rate of 6.00 million in July.

Economists had expected existing home sales to decrease by 1.7 percent to a rate of 5.89 million from the 5.99 million originally reported for the previous month.

Sector News

Energy stocks continue to see substantial strength in early afternoon trading, moving sharply higher along with the price of crude oil. Crude for November delivery is jumping $1.37 to $71.86 a barrel.

Reflecting the strength in the energy sector, the NYSE Arca Oil Index is up by 3.8 percent, the Philadelphia Oil Service Index is up by 3.4 percent and the NYSE Arca Natural Gas Index is up by 2.7 percent.

Significant strength is also visible among steel stocks, as reflected by the 3.3 percent spike by the NYSE Arca Steel Index. The index is bouncing off its lowest closing level in almost six months.

Airline stocks are also seeing considerable strength on the day, with the NYSE Arca Airline Index soaring by 3.1 percent to its best intraday level in well over a month.

Financial, computer hardware and semiconductor stocks have also moved notably higher amid broad based strength on Wall Street.

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 slid by 0.7 percent, while China's Shanghai Composite Index rose by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index jumped by 1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index surged up by 1.3 percent and 1.5 percent, respectively.

In the bond market, treasuries have moved slightly higher as traders look ahead to the Fed announcement. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less 1 basis point at 1.314 percent.