After moving sharply higher at the open, stocks have moved steadily higher throughout the trading day on Wednesday. The markets are extending the upward move seen over the course of the previous session, recovering from the downward trend seen for much of the past month.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 210.59 points or 1.7 percent at 12,338.54, the Nasdaq is up 56.48 points or 2 percent at 2,834.59 and the S&P 500 is up 23.04 points or 1.8 percent at 1,308.54.
Bargain hunting is contributing to the rally on Wall Street, with traders picking up stocks at reduced levels following the sell-off that was seen for much of May and was extended following last Friday's weak jobs report.
The markets are also benefiting from optimism about the possibility of further stimulus from the world's central banks following the Reserve Bank of Australia's interest rate cut on Tuesday.
Earlier in the day, the European Central Bank announced its widely expected decision to leave interest rates unchanged following its monetary policy meeting.
Traders were initially disappointed by ECB President Mario Draghi's remarks at a subsequent press conference, as they did not seem to indicate that the ECB was planning on providing further stimulus.
However, Draghi later told reporters that the central bank stands "ready to act" if the economic situation continues to worsen.
Positive sentiment was also generated by comments from Atlanta Federal Reserve President Dennis Lockhart, who said that the option of extending "Operation Twist" is still on the table.
Operation Twist involves replacing short-term securities in the Fed's bond portfolio with longer-term securities in an effort to push already low long-term interest rates even lower.
Among individual stocks, shares of Hovnanian Enterprises (HOV) have moved sharply higher after the homebuilder reported better than expected second quarter earnings and revenues. Hovnanian is currently posting a 17.1 percent gain.
Oxford Industries (OXM) is also posting a strong gain after reporting first quarter earnings that exceeded analyst estimates and raising its full-year guidance.
Meanwhile, shares of FuelCell Energy (FCEL) are down by 15.3 percent after the power equipment maker reported a wider than expected second quarter loss on weaker than expected revenues.
Broad based buying interest has contributed to notable strength in most of the major sectors, although steel stocks are posting particularly strong gains in mid-day trading. The NYSE Arca Steel Index has surged up by 3.5 percent, climbing further off Monday's eight-month closing low.
Mechel (MTL) and Steel Dynamics (STLD) are turning in two of the steel sector's best performances, jumping by 7.6 percent and 5.1 percent, respectively.
Electronic storage stocks have also moved sharply higher on the day, driving the NYSE Arca Disk Drive Index up by 3.4 percent. STEC, Inc. (STEC) and SanDisk (SNDK) are posting standout gains.
Significant strength is also visible among networking stocks, as reflected by the 3.2 percent gain being posted by the NYSE Arca Networking Index. Housing, semiconductor, and brokerage stocks are also seeing considerable strength.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, adding to the gains posted in the previous session. Japan's Nikkei 225 Index surged up by 1.8 percent, while Hong Kong's Hang Seng Index jumped 1.4 percent.
The major European markets also moved sharply higher over the course of the trading day. While the German DAX Index advanced by 2.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both soared 2.4 percent.
In the bond market, treasuries have moved sharply lower, extending the pullback seen in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 9 basis points at 1.646 percent.
by RTT Staff Writer
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