Stocks Clinging To Modest Gains Ahead Of Beige Book - U.S. Commentary

(RTTNews) - A rally by energy stocks is contributing to some strength on Wall Street, although buying interest has remained relatively subdued ahead of the release of the Federal Reserve's Beige Book this afternoon.

Currently, the major averages are posting modest gains on the day. The Dow is up 62.29 points or 0.3 percent at 18,224.23, the Nasdaq is up 1.71 points or less than a tenth of a percent at 5,245.54 and the S&P 500 is up 5.26 points or 0.3 percent at 2,144.86.

The modest strength on Wall Street comes amid a sharp increase by the price of crude oil, with crude for November delivery surging up $1.41 to $51.70 a barrel.

The price of crude oil reached a high of $51.93 a barrel earlier in the session, reflecting its highest level since July of 2015.

The jump by the price of oil comes following the release of a report showing an unexpected drop in weekly crude oil inventories.

The report from the Energy Information Administration said crude oil inventories slumped by 5.2 million barrels last week compared to expectations for an increase of about 2.7 million barrels.

Meanwhile, a notable decline by shares of Intel (INTC) is limiting the upside for the tech-heavy Nasdaq, with the semiconductor giant tumbling by 6.1 percent.

The drop by Intel comes after the company reported better than expected third quarter results but forecast fourth quarter revenues below analyst estimates.

In U.S. economic news, the Commerce Department released a report before the start of trading showing that housing starts unexpectedly tumbled to their lowest level in well over a year in September.

The Federal Reserve is scheduled to release its Beige Book later in the day, potentially shedding some additional light on the outlook for monetary policy.

Sector News

Among energy stocks, oil service stocks have shown a particularly strong move to the upside, resulting in a 3.2 percent jump by the Philadelphia Oil Service Index. With the gain, the index reached a nearly three-month intraday high.

Halliburton (HAL) is posting a standout gain within the oil service sector after reporting an unexpected third quarter profit.

Gold stocks are also seeing substantial strength in mid-day trading, with the NYSE Arca Gold Bugs Index surging up by 3.4 percent.

The gains by gold stocks come amid an increase by the precious metal, as gold for December delivery is climbing $9.50 to $1,272.40 an ounce.

Significant strength is also visible among steel stocks, as reflected by the 2 percent gain being posted by the NYSE Arca Steel Index. The gain has lifted the index to a two-month intraday high.

Banking stocks are also seeing notable strength on the day, while most of the other major sectors are showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Australia's All Ordinaries Index climbed by 0.5 percent. However, Hong Kong's Hang Seng Index bucked the uptrend and fell by 0.4 percent.

Meanwhile, the major European markets moved to the upside on the day after seeing initial weakness. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index both rose by 0.3 percent.

In the bond market, treasuries have shown a lack of direction after moving higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.749 percent.