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U.S. Stocks Turn Positive After Initial Move To The Downside

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After recovering from an initial move to the downside, stocks have moved modestly higher over the course of the trading session on Wednesday. The major averages have climbed well off their lows of the session and into positive territory.

Currently, the major averages are hovering just above the unchanged line. The Dow is up 42.66 points or 0.2 percent at 27,734.15, the Nasdaq is up 5.41 points or 0.1 percent at 8,491.50 and the S&P 500 is up 2.66 points or 0.1 percent at 3,094.50.

The initial weakness on Wall Street came amid renewed uncertainty about a potential U.S.-China trade deal after President Donald Trump failed to offer many details about the trade talks in a speech on Tuesday.

In remarks at the Economic Club of New York, Trump claimed the Chinese are "dying to make a deal" and an agreement is "close," although investors had been hoping for more substantive comments.

The president said a significant phase one trade deal with China "could happen soon" but stressed that he would only accept an agreement that is good for U.S. companies and workers.

Trump later denied that his trade war with China is hurting industry or causing uncertainty and threatened further increases in tariffs if a deal is not reached.

However, selling pressure waned as Federal Reserve Chairman Jerome Powell reiterated that the central bank is likely to leave interest rates unchanged in the near future.

Powell said in prepared remarks before the Congressional Joint Economic Committee that the current stance of monetary policy is likely to remain appropriate as long as incoming information about the economy remains broadly consistent with the Fed's outlook.

"Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely," Powell said.

He added, "This favorable baseline partly reflects the policy adjustments that we have made to provide support for the economy."

Trump renewed his attacks on the Fed during his remarks on Tuesday, claiming the economy and the markets would be even stronger if the central bank would take his advice and slash interest rates further.

In U.S. economic news, the Labor Department released a report showing consumer prices rose by slightly more than anticipated in the month of October.

The Labor Department said its consumer price index climbed by 0.4 percent in October after coming in unchanged in September. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, core consumer prices edged up by 0.2 percent in October after a 0.1 percent uptick in September. The uptick in core prices matched economist estimates.

Sector News

Interest rate-sensitive utilities stocks have shown a strong move to the upside on the day, driving the Dow Jones Utility Average up by 1.3 percent.

The utility average continues to regain ground after ending Monday's session at its lowest closing level in almost three months.

Considerable strength is also visible among gold stocks, as reflected by the 1.3 percent gain being posted by the NYSE Arca Gold Bugs Index.

The strength among gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery climbing $9.80 to $1,463.50 an ounce.

On the other hand, oil service stocks have moved sharply lower on the day, dragging the Philadelphia Oil Service Index down by 2 percent. The weakness in the sector comes despite an increase in oil prices.

Steel stocks have shown a notable move to the downside amid renewed uncertainty about a U.S.-China trade deal, with the NYSE Arca Steel Index falling by 1.3 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.9 percent, while Hong Kong's Hang Seng Index plunged by 1.8 percent.

The major European markets also moved to the downside on the day. While the German DAX Index fell by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both edged down by 0.2 percent.

In the bond market, treasuries are extending the upward move seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 1.886 percent.

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