Stocks have moved mostly higher over the course of the trading day on Wednesday, adding to the gains posted in the previous session. The markets have benefited from a positive reaction to a batch of relatively upbeat U.S. economic data.
After moving modestly higher in early trading, the major averages have seen some further upside as the day has progressed. The Dow is up 84.88 points or 0.7 percent at 12,619.55, the Nasdaq is up 22.76 points or 0.8 percent at 2,876.82 and the S&P 500 is up 11.25 points or 0.9 percent at 1,331.24.
The early strength on Wall Street was partly due to the release of a report from the Commerce Department showing a bigger than expected increase in durable goods orders in May, with the data offsetting some of the recent concerns about the outlook for the manufacturing sector.
The report showed that durable goods orders jumped by 1.1 percent in May following a revised 0.2 percent decrease in April. Economists had expected orders to increase by 0.4 percent.
Excluding orders for transportation equipment, durable goods orders increased by a more modest 0.4 percent in May compared to a 0.6 percent drop in the previous month.
Further buying interest was generated by the release of a report from the National Association of Realtors showing much stronger than expected pending home sales growth in May.
NAR said its pending home sales index jumped 5.9 percent to 101.1 in May after falling 5.5 percent to 95.5 in April. Economists had expected pending home sales to show a much more modest 1.2 percent increase.
A pending 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 better than expected pending home sales data came on the heels of the release of upbeat reports on new home sales and home prices earlier in the week.
While stocks have moved mostly higher following the release of the data, the major averages remain well off last week's highs amid uncertainty about an upcoming summit of European leaders.
Ahead of the meeting, German Chancellor Angela Merkel reiterated her opposition to the idea of common eurozone bonds, saying that Europe would not share debt liability in her lifetime.
After helping to lead the markets higher on Tuesday, housing stocks are seeing continued strength on the heels of the pending home sales data. The Philadelphia Housing Sector Index is up by 2.7 percent after reaching its best intraday level in over a month.
Lennar (LEN) is turning in one of the housing sector's best performances, with the homebuilder surging up by 4.6 percent after reporting better than expected second quarter earnings and revenues. The company also reported a 40 percent jump in new orders.
Natural gas stocks have also moved sharply higher on the day, benefiting from a notable increase by the price of natural gas. With natural gas for August delivery climbing $0.092 to $2.899 per million BTUs, the NYSE Arca Natural Gas Index is up by 2.8 percent.
Significant strength has also emerged among healthcare provider stocks, as reflected by the 2.5 percent gain being posted by the Morgan Stanley Healthcare Provider Index. Oil service, brokerage, networking, and semiconductor stocks are also posting strong gains.
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 1 percent.
The major European markets also showed strong moves to the upside on the day. The U.K.'s FTSE 100 Index jumped 1.4 percent, while the German DAX Index and the French CAC 40 Index soared 1.5 percent and 1.7 percent, respectively.
In the bond market, treasuries continue to turn in a lackluster performance, lingering near the unchanged line. The yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.633 percent.
by RTT Staff Writer
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