Major Averages All Close Higher But Dow Outperforms - U.S. Commentary

(RTTNews) - While a jump by shares of IBM (IBM) contributed to a notable advance by the Dow, the broader Nasdaq and S&P 500 spent much of the trading day on Wednesday lingering near the unchanged line. The major averages still all reached new record closing highs.

The major averages all closed in positive territory, although the Dow outperformed its counterparts by a wide margin. The Dow climbed 160.16 points or 0.7 percent to 23,157.60, while the Nasdaq inched up 0.56 points or less than 0.1 percent to 6,624.22 and the S&P 500 ticked up 1.90 points or 0.1 percent to 2,561.26.

IBM surged up by 8.9 percent after the tech giant reported third quarter results that exceeded analyst estimates on both the top and bottom lines.

The advance by the Dow also reflected a notable rebound by shares of Goldman Sachs (GS), which climbed by 2.5 percent.

The lack of direction shown by the broader markets came as traders seemed reluctant to make significant moves following the recent upward trend on Wall Street.

In economic news, the Commerce Department released a report showing a much bigger than expected slump in housing starts in the month of September.

The Commerce Department said housing starts plunged by 4.7 percent to an annual rate of 1.127 million in September from the revised August estimate of 1.183 million. Housing starts has been expected to edge down by 0.5 percent.

With the Hurricanes Harvey and Irma disrupting single-family home construction in the South, housing starts slumped to their lowest level since September of 2016.

Building permits, an indicator of future housing demand, also tumbled by 4.5 percent to an annual rate of 1.215 million in September from a revised 1.272 million in August. Economists had expected building permits to drop by 2.9 percent.

Later in the day, the Federal Reserve released its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.

The Beige Book said reports from the twelve districts indicated that economic activity increased in September through early October, with the pace of growth split between modest and moderate.

The Fed noted the Richmond, Atlanta, and Dallas Districts reported major disruptions from Hurricanes Harvey and Irma in some areas and sectors.

Employment growth was described as modest on balance, while the Fed said price pressures also remained modest since the previous report.

Sector News

Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.

Trucking stocks showed a significant move to the upside, however, with the Dow Jones Trucking Index climbing by 1.6 percent. The index rebounded after closing lower for the three straight sessions.

YRC Worldwide (YRCW), Ryder (R), and Knight-Swift Transportation (KNX) turned in some of the trucking sector's best performances.

Electronic storage and financial stocks also saw some strength on the day, although buying interest was relatively subdued.

On the other hand, oil service stocks came under pressure, dragging the Philadelphia Oil Service Index down by 2.1 percent. With the drop, the index fell to its lowest closing level in almost a month.

The weakness among oil service stocks came despite a modest increase by the price of crude oil, as crude for November delivery rose $0.16 to $52.04 a barrel.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region saw modest strength during trading on Wednesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both crept up by 0.1 percent, while China's Shanghai Composite Index rose by 0.3 percent.

The major European markets also moved to the upside on the day. The U.K.'s FTSE 100 Index, the French CAC 40 Index and the German DAX Index all climbed by 0.4 percent.

In the bond market, treasuries came under pressure after ending the previous session slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.1 basis points to 2.339 percent.

Looking Ahead

Earnings is likely to impact trading on Thursday, with Alcoa (AA), American Express (AXP), eBay (EBAY), and United Continental (UAL) among the companies releasing their quarterly results after the close of today's trading.

Philip Morris (PM), Travelers (TRV), and Verizon (VZ) are also among the companies due to report their results before the start of trading on Thursday.

Traders are also likely to keep an eye on reports on weekly jobless claims, Philadelphia-area manufacturing activity and leading economic indicators.