U.S. Stocks Show Significant Move Back To The Upside

(RTTNews) - Stocks initially showed a lack of direction but moved sharply higher over the course of the trading session on Wednesday. With the rally on the day, the major averages partly offset the downward move seen to start the week.

The major averages pulled back off their highs of the session going into the close but held on to strong gains. The Dow jumped 344.23 points or 1 percent to 34,564.59, the Nasdaq surged 272.02 points or 2 percent to 13,643.59 and the S&P 500 shot up 49.14 points or 1.1 percent to 4,446.59.

The rally on Wall Street may partly have reflected bargain hunting following the downturn seen over the course of the trading day on Tuesday.

The pullback on Tuesday extended the downward trend for the markets seen throughout much of late March and early April, with the Nasdaq and the S&P 500 falling to their lowest closing levels in almost a month.

Stocks may also have benefitted from a continued decrease by treasury yields, with the ten-year yield pulling back further off the three-year closing high set on Monday.

The drop by treasury yields came even though the Labor Department released a report showing U.S. producer prices surged by more than expected in the month of March.

The Labor Department said its producer price index for final demand shot up by 1.4 percent in March after advancing by an upwardly revised 0.9 percent in February.

Economists had expected producer prices to jump by 1.1 percent compared to the 0.8 percent increase originally reported for the previous month.

Energy prices led the way higher, skyrocketing by 5.7 percent during the month, while food prices also spiked by 2.4 percent.

With the bigger than expected monthly increase, the annual rate of producer price growth accelerated to a record high 11.2 percent in March from 10.3 percent in February.

Despite the rally by the broader markets, shares of JPMorgan Chase (JPM) slumped after the financial giant reported first quarter earnings that came in below analyst estimates.

Sector News

Airline stocks showed a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 4.7 percent.

Delta Air Lines (DAL) helped lead the sector higher after reporting a narrower than expected first quarter loss and providing upbeat guidance.

Steel stocks also turned in a strong performance following strong Chinese exports data, driving the NYSE Arca Steel Index up by 2.6 percent.

Significant strength was also visible among biotechnology stocks as reflected by the 2.6 percent jump by the NYSE Arca Biotechnology Index.

Oil service, semiconductor and retail stocks also saw notable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.9 percent, while China's Shanghai Composite Index slid by 0.8 percent.

The major European markets also finished the day mixed. While the German DAX Index fell by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both inched up by 0.1 percent.

In the bond market, treasuries extended the rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.8 basis points to 2.687 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to the latest batch of U.S. economic data, including reports on initial jobless claims, retail sales, import and export prices and consumer sentiment.

Earnings news is also likely to attract attention, with financial giants Citigroup (C), Goldman Sachs (GS) and Wells Fargo (WFC) among the companies due to report their quarterly results before the start of trading.