Stocks have shown a strong upward move over the course of the trading day on Wednesday, with the major averages bouncing firmly into positive territory after seeing some initial weakness. The turnaround came on the heels of the release of some better than expected economic data.
The initial downward move came on the heels of the release of a report from ADP showing that non-farm private employment fell by a bigger than expected 742,000 jobs following a revised decrease of 706,000 jobs in February.
Selling pressure waned not long after the open, however, and stocks moved back to the upside following the release of monthly reports on pending home sales, manufacturing activity and construction spending.
The National Association of Realtors said its index of pending home sales rose 2.1 percent to 82.1 in February from a reading of 80.4 in January. The increase by the index came as a surprise to economists, who had expected the reading to come in unchanged.
Lawrence Yun, NAR chief economist, said, Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we'll see additional sales gains.
Meanwhile, the Commerce Department released its monthly report on construction spending for February showing that spending fell 0.9 percent. Analysts expected spending to fall 1.9 percent following a 3.5 percent decline in the previous month.
Additionally, the ISM Manufacturing index edged up to 36.3 in March from 35.8 in February, although a reading below 50 still indicates a contraction in the sector. Economists had been expecting the index to come in at 36.0.
In other news, President Barack Obama has held a series of bilateral meeting with world leaders in advance of the Group of 20 Summit in London, as he attempts to set the stage for a productive meeting.
Obama urged a concerted effort to stimulate the global economy following a meeting with U.K. Prime Minister Gordon Brown. Obama called for world leaders at the G20 to act with a sense of urgency as they look to move forward from the current economic downturn.
The president is expected to present a raft of proposals, including increased oversight for hedge funds and more powers to deal with troubled financial firms deemed too big to fail.
The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is currently up 114.37 at 7,723.29, the Nasdaq is up 20.10 at 1,548.69 and the S&P 500 is up 10.11 at 807.98.
Stocks in the financial sector are leading the rebound by the broader markets, with banking stocks posting particularly strong gains. The strength in the banking sector is reflected by the 3.5 percent gain being shown by the Kbw Bank Index.
Within the sector, Huntington Bancshares (HBAN) is posting one of the biggest gains on the day, up 11.5 percent so far. With the advance, the stock has risen off of the nearly three-week closing low it set on Monday.
Steel and housing stocks are also posting considerable gains on the day, with the Amex Steel Index posting a gain of 4 percent, while the Philadelphia Housing Index has risen 3.7 percent on the day.
Most of the other major sectors have also turned higher after moving lower earlier in the session, with significant strength visible in the telecom, computer hardware, and gold sectors.
At the other end of the spectrum, biotechnology stocks continue to turn in some of the worst performances of the day, driving the Amex Biotechnology Index down 2.5 percent.
Stocks In The News
Among individual stocks, Sealy Corp. (ZZ) is posting a gain of 96.6 percent on the day after the company released quarterly results. With the advance, the stock has risen to its highest level in nearly three months.
The company reported net income for the first quarter of $0.05 per share, compared to $0.17 per share in the year-ago quarter. On average, analysts expected the company to report a loss of $0.03 per share.
Additionally, Worthington Industries, Inc. (WOR) is up 10.1 percent on the day after the company reported third-quarter net earnings of $0.02 per share, compared to $0.23 per share last year. Analysts had expected Worthington to report a loss of $0.01 per share.
Meanwhile, Celgene Corp. (CELG) has plummeted 16.7 percent on the day after the company provided first quarter guidance that failed to please investors.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher, with Japan's Nikkei 225 Index advancing by 3 percent. However, the Australian and Hong Kong markets bucked the uptrend.
Meanwhile, the major European markets have followed the U.S. markets into the green. The French CAC 40 Index and the German DAX Index are up 1.2 percent and 1.1 percent, respectively, while the U.K.'s FTSE 100 Index is showing a 0.8 percent gain.
In the bond market, treasuries are showing modest strength on the day after some earlier uncertainty. Subsequently, the yield on the benchmark 10-year note is down 1.3 basis points at 2.672 percent.
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