With traders shrugging off some disappointing economic news, stocks have turned higher over the course of the trading day on Wednesday. The major averages have all climbed into positive territory after seeing some early weakness.
The turnaround by the markets comes as some traders feel that the weak economic data has already been priced into the markets, with technology stocks helping to lead the way back to the upside after coming under pressure in the previous session.
Several key economic reports were released earlier in the day, with a report from the Commerce Department showing that new home sales fell to their lowest level in over seventeen years in the month of October.
The report showed that that new home sales fell 5.3 percent to an annual rate of 433,000 units in October from the revised September rate of 457,000 units. With the decrease, new home sales fell to their lowest level since January of 1991.
While separate reports also showed notable decreases in personal spending, consumer confidence and durable goods orders, a report from the Labor Department showed that weekly jobless claims pulled back off the sixteen year high set in the previous week.
The Labor Department said initial jobless claims in the week ended November 22nd fell to 529,000 from the 543,000 claims filed the previous week. Economists had expected jobless claims to fall to 537,000 from the 542,000 originally reported for the previous week.
In other news, President-elect Barack Obama named former Federal Reserve Chairman Paul Volcker as the head of a new economic recovery board. Volcker, who served as Fed Chairman between 1979 and 1987, is the latest addition to Obama's economic team as the president-elect prepares to face an economy in recession.
Under Volcker, inflation peaked at 13.5 percent in 1981. In response, Volcker hiked up the federal funds rate, sending the economy into a recession with unemployment rates at their highest since the Great Depression. However, by the end of his efforts, inflation was successfully lowered to 3.2 percent by 1983.
While the current economic environment is not focused on inflation, concerns about a deep recession and deflation in the midst of financial and housing crises are at the forefront of many investors' minds. The economic board is designed to assist Obama in the recovery of the struggling economy.
The major averages are currently all in positive territory, although the tech-heavy Nasdaq is outperforming the Dow and the S&P 500. The Nasdaq is currently up 34.22 or 2.3 percent at 1,498.95, while the Dow is up 43.17 or 0.5 percent at 8,522.64 and the S&P 500 is up 6.41 or 0.8 percent at 863.81.
Sector News
As the broader markets see notable gains, the major sectors are following suit, with many of the sector indices posting notable gains.
Despite the poor new home sales report, housing stocks are turning in some of the best performances of the day. With notable gains by Champion Enterprises (CHB), Meritage Homes (MTH), and Radian Group (RDN), the Philadelphia Housing Sector Index is up 6.6 percent.
With the advance, the housing sector index is moving further off the record closing low that it set last Thursday, rising to its highest intraday level in two weeks.
Significant strength is also visible in the semiconductor sector, as reflected by the 4.1 percent gain currently being shown by the Philadelphia Semiconductor Index. Advance Micro Devices (AMD), KLA-Tencor (KLAC), and Teradyne (TER) are posting notable gains.
Steel, electronic storage, and oil service stocks are also posting substantial gains. The Amex Steel Index is up 4.4 percent, while the Amex Disk Drive Index and the Philadelphia Oil Service Index are up 3.7 percent and 3.9 percent, respectively.
On the other hand, weakness remains visible among pharmaceutical, chemical, and utilities stocks. Among pharmaceutical stocks, Johnson & Johnson (JNJ) is down 3.3 percent after the FDA rejected the company's new-drug application for a skin infection treatment.
Stocks In The News
Fidelity National Financial (FNF) is posting a gain of 20.8 percent on the day following news that it purchased three subsidiaries from LandAmerica (LFG) for $298 million as the company filed for bankruptcy. With the advance, the stock has moved further off the multi-year closing low it set last Thursday and climbed to its highest level in over a month.
Coldwater Creek (CWTR) is also posting a substantial gain after the company reported a third quarter net loss of $0.01 per share, compared to a net loss of $0.07 per share in the year-ago quarter. Analysts had expected a loss of $0.08 per share for the quarter. Currently, the stock is up 19.6 percent on the day.
Meanwhile, Borders Group (BGP) is posting a loss of 42.9 percent after the company reported a wider than expected third quarter loss and a significant decline in sales. The company also said it is no longer contemplating a sale, an about face from its earlier announcement that it was evaluating strategic alternatives.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed mixed on Wednesday with Japan's benchmark Nikkei 225 index closing down 1.3 percent, while Hong Kong's Hang Seng index ended the day up 3.8 percent.
Meanwhile, the major European markets ended the day mostly lower, although off their worst levels of the day. The French CAC 40 Index and the U.K.'s FTSE 100 Index fell 2.2 percent and 0.4 percent, respectively, while the German DAX Index closed nearly unchanged.
In the bond market, treasuries are off their highs of the day, but continue to show notable strength. Subsequently, the yield on the benchmark ten-year note is currently down 8.7 basis points at 3.005 percent.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.