U.S. Stocks Show Notable Rebound Along With Oil Prices

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Wednesday, partly offsetting the steep drop seen over the two previous sessions. The major averages all showed significant moves to the upside on the day.

The major averages pulled back off their highs going into the close but still posted strong gains. The Dow jumped 456.94 points or 2 percent to 23,475.82, the Nasdaq spiked 232.15 points or 2.8 percent to 8,495.38 and the S&P 500 surged up 62.75 points or 2.3 percent to 2,799.31.

The rally on Wall Street partly reflected a positive reaction to a substantial rebound in oil prices following the historic drop seen earlier this week.

The front month crude oil contract turned negative for the first time in history on Monday, and later month futures showed another substantial move to the downside on Tuesday.

However, crude oil for June delivery has moved sharply higher over the course of this morning after falling near $10 a barrel overnight. Crude for June delivery surged up $2.21 to $13.78 a barrel.

Buying interest was also generated in reaction to news that the Senate has passed a new bill to provide funding for hospitals and small businesses and expand coronavirus testing.

The $484 billion aid package was approved unanimously by the Senate and now heads to the House, which could approve the bill as soon as Thursday.

President Donald Trump has said he will sign the bill and then plans to begin discussions on additional legislation to provide fiscal relief for states and local governments, increase infrastructure spending, provide tax incentives for restaurants and entertainment businesses and cut payroll taxes.

Sector News

Gold stocks turned in some of the market's best performances on the day, driving the NYSE Arca Gold Bugs Index up by 6.9 percent to its best closing level in well over three years.

The rally by gold stocks came amid a substantial increase by the price of the precious metal, as gold for June delivery skyrocketed $50.50 to $1,738.30 an ounce.

Significant strength was also visible among semiconductor stocks, as reflected by the 5.9 percent spike by the Philadelphia Semiconductor Index.

The jump in oil prices also contributed to considerable strength among energy stocks, with the NYSE Arca Oil Index and the Philadelphia Oil Service Index surging up by 4.8 percent and 2.9 percent, respectively.

Networking, software, utilities and chemical stocks also showed strong moves to the upside amid broad based buying interest 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 climbed by 0.6 percent.

Meanwhile, the major European markets all showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index spiked by 2.3 percent, the German DAX Index surged up by 1.6 percent and the French CAC 40 Index jumped by 1.3 percent.

In the bond market, treasuries gave back ground after moving notably higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.8 basis points to 0.619 percent.

Looking Ahead

Following a few relatively quiet days on the economic front, trading on Thursday may be impacted by reaction to reports on weekly jobless claims and new home sales.