Stocks Regain Ground As Traders Go Bargain Hunting - U.S. Commentary

(RTTNews) - After moving sharply lower over the course of the previous session, stocks regained some ground during trading on Wednesday. The markets benefited from bargain hunting despite lingering concerns about developments regarding Syria.

The major averages gave back some ground going into the close but still ended the day in positive territory. The Dow rose 48.38 points or 0.3 percent to 14,824.51, the Nasdaq climbed 14.83 points or 0.4 percent to 3,593.35 and the S&P 500 advanced 4.48 points or 0.3 percent to 1,634.96.

The rebound on Wall Street came as some traders looked to pick up stocks at reduced levels following yesterday's sell-off.

The Dow bounced off the two-month closing low set on Tuesday, while the Nasdaq and the S&P 500 regained ground after hitting their lowest closing levels in well over a month.

Buying interest may also have been generated by a report from the National Association of Realtors showing a bigger than expected drop in pending home sales in July.

NAR said its pending home sales index fell 1.3 percent to 109.5 in July after dipping 0.4 percent to 110.9 in June. Economists had been expecting the index to drop by about 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The data adds to recent evidence that rising mortgage rates are leading to a slowdown by the housing market, potentially delaying the Federal Reserve's decision to begin scaling back its stimulus program.

Nonetheless, traders seemed somewhat reluctant to make any significant moves as they kept an eye on the latest developments regarding Syria.

British Prime Minister David Cameron said the U.K. is putting forward a resolution to the UN Security Council condemning the Syrian government's alleged chemical weapons attack on civilians.

The resolution would also authorize all necessary measures to protect civilians from chemical weapons, providing the diplomatic groundwork for military action.

Senior officials have told NBC news the U.S. could launch cruise missile strikes against Syria as early as Thursday night.

Sector News

Oil and oil service stocks turned in some of the market's best performances on the day, driving the NYSE Arca Oil Index and the Philadelphia Oil Service Index up by 1.8 percent and 1.3 percent, respectively.

The strength in the sectors came as the price of crude oil saw some further upside after jumping by more than $3 a barrel on Tuesday. Crude for October delivery climbed $1.09 to $110.10 a barrel.

While Syria is not a major oil producer, the price of crude has benefited from concerns that U.S. military action could impact the entire region.

Considerable strength was also visible among semiconductor stocks, as reflected by the 1.2 percent gain posted by the Philadelphia Semiconductor Index. The gain by the index came after it ended the previous session at a nearly four-month closing low.

Biotechnology stocks also saw significant strength on the day, while most of the major sectors ended the day showing only modest moves.

Meanwhile, gold stocks showed another substantial downturn on the day, with the NYSE Arca Gold Bugs Index falling by 2.9 percent after rising as much as 3 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.5 percent, while Hong Kong's Hang Seng Index slumped by 1.6 percent.

The major European markets also moved to the downside on the day. While the German DAX Index fell by 1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index both edged down by 0.2 percent.

In the bond market, treasuries moved notably lower, partly offsetting the gains posted over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 6.1 basis points to 2.782 percent. Looking Ahead

Investors are likely to keep an eye on Syria on Thursday, although trading could also be impacted by the release of the Labor Department's report on weekly jobless claims as well as the Commerce Department's revised report on second quarter GDP.