Stocks Move Higher After Experiencing Choppy Trading Earlier - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks have moved mostly higher over the course of the trading day on Wednesday. The strength that has emerged on the day is extending the rally that was seen in the previous session.

Currently, the major averages are hovering in positive territory. The Dow is up 89.26 points or 0.5 percent at 16,689.11, the Nasdaq is up 13.55 points or 0.3 percent at 4,874.07 and the S&P 500 is up 11.31 points or 0.6 percent at 1,989.40.

The choppy trading seen earlier in the day came as traders continued to express uncertainty about whether the Fed will announce an increase in interest rates tomorrow.

Analysts currently remain split on the issue, with some suggesting that recent economic data supports the first rate hike in nearly a decade while others believe recent market volatility will keep the Fed on hold.

Nonetheless, buying interest has emerged as the day has progressed, with resource stocks leading the way higher amid an increase in commodities prices.

The markets may also be benefiting from a Labor Department showing that consumer price inflation remains well below the Fed's 2 percent target, providing further support for the view that the central bank will leave rates at record lows.

Consumer prices in August were up by just 0.2 percent compared to the same month a year ago, unchanged from the previous month.

The report said the annual rate of growth in core consumer prices, which exclude food and energy prices, was also unchanged at 1.8 percent.

Rob Carnell, chief international economist at ING, said, "This result doesn't even give a directional boost to the hawks, which might have been the case if energy had dragged just a little less."

"That said, this was never likely to be a decisive piece of data, and the FOMC members will probably go into this meeting already with a good idea of what they want to do," he added.

Meanwhile, the National Association of Home Builders released a separate report showing a continued improvement in homebuilder confidence in the month of September.

The report said the NAHB/Wells Fargo Housing Market Index crept up to 62 in September from 61 in August, while economists had expected the index to come in unchanged.

With the unexpected uptick, the housing market index reached its highest level since hitting 68 in October of 2005.

Sector News

Gold stocks have shown a substantial move to the upside over the course of the session, driving the NYSE Arca Gold Bugs Index up by 4.9 percent. The gain by the index comes after it ended the previous session at its lowest closing level in over a month.

The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for December delivery jumping $19.60 to $1,122.20 an ounce.

Significant strength has also emerged among energy stocks, which are moving higher along with the price of crude oil. Crude for October delivery is currently surging up $2.45 to $47.04 a barrel.

The sharp increase by the price of oil comes after a government report showed that crude oil inventories fell by 2.1 million barrels in the week ended September 11th.

Steel, railroad, computer hardware, and utilities stocks have also moved to the upside on the day, while some weakness remains visible among biotechnology stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index surged up by 2.4 percent.

The major European markets also moved to the upside on the day. While the German DAX Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index jumped by 1.5 percent and 1.7 percent, respectively.

In the bond market, treasuries continue to show a lack of direction after ending the previous session sharply lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.276 percent.