Stocks have moved notably higher over the course of the trading day on Wednesday, extending the upward move seen in the previous session. The markets are benefiting from considerable strength that has emerged among technology stocks.
The major averages are all in positive territory, although the tech-heavy Nasdaq is outperforming its counterparts. While the Nasdaq is up 33.25 points or 1.1 percent at 2,943.29, the Dow is up 76.03 points or 0.6 percent at 12,881.57 and the S&P 500 is up 7.77 points or 0.6 percent at 1,371.44.
Much of the strength that has emerged on Wall Street stems from the rally by tech stocks, which have moved sharply higher despite disappointing guidance from semiconductor giant Intel (INTC).
While Intel reported better than expected second quarter earnings after the close of trading on Tuesday, the company also reported weaker than expected revenues and lowered its full year revenue growth outlook. Nonetheless, shares of Intel have risen by 3.1 percent.
Tech stocks may be benefiting from bargain hunting following recent weakness in the sector, with the gain by Intel extending a recovery from the six-month closing low it set last Thursday.
Buying interest may also have been generated by a report released by the Commerce Department before the start of trading showing a bigger than expected rebound in housing starts in the month of June.
The report showed that housing starts jumped 6.9 percent to an annual rate of 760,000 in June from the revised May estimate of 711,000. Economists had expected housing starts to climb to 745,000 from the 708,000 originally reported for the previous month.
On the other hand, building permits, an indicator of future housing demand, fell by 3.7 percent to an annual rate of 755,000 in June from the revised May rate of 784,000.
Traders are also keeping an eye on Federal Reserve Chairman Ben Bernanke's second day of testimony on Capitol Hill, with the Fed Chief facing questions from the House Financial Services Committee.
Bernanke's prepared remarks were unchanged from those he delivered to the Senate Banking Committee on Tuesday.
While significant strength is visible throughout the tech sector, semiconductor stocks are posting particularly strong gains. The Philadelphia Semiconductor Index has surged up by 3.4 percent, bouncing off a seven-month closing low.
NXP Semiconductors (NXPI), Nvidia (NVDA), and Cree (CREE) are turning in some of the semiconductor sector's best performances.
Networking and computer hardware stocks are also seeing considerable strength, with the NYSE Arca Networking Index and the NYSE Arca Computer Hardware Index advancing by 3 percent and 2.9 percent, respectively.
Outside of the tech sector, health insurance stocks have shown a strong move to the upside on the day, driving the Morgan Stanley Healthcare Payor Index up by 1.7 percent. Defense, trucking, and oil service stocks are also posting notable gains.
Meanwhile, gold stocks have come under pressure amid a decrease by the price of the precious metal. With gold for August delivery sliding $10.90 to $1,578.60 the NYSE Arca Gold Bugs Index is down by 1.1 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While Japan's Nikkei 225 Index edged down by 0.3 percent, China's Shanghai Composite Index advanced by 0.4 percent.
Meanwhile, the major European markets all showed strong moves to the upside on the day. The U.K.'s FTSE 100 Index jumped by 1 percent, while the German DAX Index and the French CAC 40 Index surged up by 1.6 percent and 1.8 percent, respectively.
In the bond market, treasuries have moved back to the upside after giving back some ground in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 1.486 percent.
by RTT Staff Writer
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