Stocks Close Mostly Higher Following Slew Of Economic Data - U.S. Commentary

(RTTNews) - After moving lower over the two previous sessions, stocks moved back to the upside during trading on Wednesday. The gains on the day extended the recent back-and-forth trend shown by the markets over the past few weeks.

The major averages pulled back off their best levels going into the close but remained firmly positive. The Dow advanced 112.58 points or 0.6 percent to 18,281.03, the Nasdaq climbed 26.36 points or 0.5 percent to 5,316.02 and the S&P 500 rose 9.24 points or 0.4 percent to 2,159.73.

The strength on Wall Street came following the release of a slew of U.S. economic data, including a report from the Institute for Supply Management showing a substantial acceleration in service sector growth in the month of September.

The ISM said its non-manufacturing index surged up to 57.1 in September from 51.4 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to rise to 52.9.

With the much bigger than expected increase, the index rose to its highest level since reaching 58.3 last October.

"The comments from the respondents are mostly positive about business conditions and the overall economy," said Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee.

He added, "A degree of uncertainty does exist due to geopolitical conditions coupled with the upcoming U.S. presidential election."

A separate report from payroll processor ADP said private sector employment rose by 154,000 jobs in September after climbing by a downwardly revised 175,000 in August.

Economists had expected employment to climb by about 170,000 jobs compared to the increase of 177,000 jobs originally reported for the previous month.

The Commerce Department also released a pair of reports showing an unexpectedly wider trade deficit and an unexpected uptick in factory orders in August.

Sector News

Energy stocks saw considerable strength on the day, benefiting from a sharp increase by the price of crude oil. Crude for November delivery jumped $1.14 to $49.83 a barrel.

Within the energy sector, oil service stocks posted particularly strong gains. The Philadelphia Oil Service Index surged up by 2.8 percent to its best closing level in well over a month.

Significant strength was also visible among financial stocks, with the Dow Jones Banks Index and the NYSE Arca Broker/Dealer Index spiking by 2 percent and 2.1 percent, respectively.

Steel, railroad, networking, and biotechnology stocks also moved notably higher, while commercial real estate stocks bucked the uptrend 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 and Hong Kong's Hang Seng Index rose by 0.5 percent and 0.4 percent, respectively, while Australia's All Ordinaries Index fell by 0.6 percent.

Meanwhile, the major European markets all moved lower on the day. While the U.K.'s FTSE 100 Index slid by 0.6 percent, the German DAX Index and the French CAC 40 Index both dropped by 0.3 percent.

In the bond market, treasuries extended the downward trend seen over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.3 basis points to 1.716 percent.

Looking Ahead

A report on weekly jobless claims may attract some attention on Thursday, although trading activity is likely to be somewhat subdued ahead of the release of the more closely watched monthly jobs report on Friday.