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Major Averages Hovering Firmly In Positive Territory In Mid-Day Trading

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Stocks remain firmly positive in mid-day trading on Wednesday after showing a strong move to the upside early in the session. With the upward move on the day, the major averages are regaining ground after closing lower for the three straight sessions.

The major averages have moved roughly sideways in recent trading, holding on to notable gains. The Dow is up 198.53 points or 0.7 percent at 27,701.34, the Nasdaq is up 50.55 points or 0.6 percent at 8,571.20 and the S&P 500 is up 21.38 points or 0.7 percent at 3,114.58.

The rebound on Wall Street comes after a report from Bloomberg News indicated the U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase one trade deal.

Citing people familiar with the talks, Bloomberg said U.S. negotiators expect a phase one deal to be completed before U.S. tariffs are set to rise on December 15.

The people told Bloomberg outstanding issues in the talks include how to guarantee China's purchases of U.S. agricultural goods and exactly which tariffs to roll back.

Bloomberg said the people downplayed President Donald Trump's recent remarks suggesting he would like to delay completing an agreement until after the 2020 elections, noting the president was speaking off the cuff.

Renewed optimism about a potential trade deal has helped offset any negative sentiment generated by some disappointing economic data, including a report from payroll processor ADP showing much weaker than expected private sector job growth in the month of November.

ADP said private sector employment rose by 67,000 jobs in November after climbing by a revised 121,000 jobs in October.

Economists had expected employment to jump by 140,000 jobs compared to the addition of 125,000 jobs originally reported for the previous month.

"The job market is losing its shine," said Mark Zandi, chief economist of Moody's Analytics. "Job openings are declining and if job growth slows any further unemployment will increase."

A separate report released by the Institute for Supply Management showed the pace of growth in U.S. service sector activity slowed by more than anticipated in the month of November.

The ISM said its non-manufacturing index dipped to 53.9 in November after climbing to 54.7 in October. While a reading above 50 still indicates service sector growth, economists had expected the index to edge down to 54.5.

Sector News

Energy stocks continue to see substantial strength in mid-day trading, benefiting from a sharp increase by the price of crude oil.

Crude for January delivery is spiking $2.05 to $58.15 a barrel after the Energy Information Administration said crude oil inventories plunged by 4.9 million barrels in the week ended November 29th.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index have soared up by 4.2 percent and 3.7 percent, respectively. The NYSE Arca Oil Index has also surged up by 1.9 percent.

Significant strength is also visible among steel stocks, as reflected by the 2.1 percent jump by the NYSE Arca Steel Index.

Semiconductor, transportation and banking stocks are also seeing considerable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.1 percent, while Hong Kong's Hang Seng Index plunged by 1.3 percent.

Meanwhile, European stocks moved mostly higher on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the German DAX Index and the French CAC 40 Index jumped by 1.2 percent and 1.3 percent, respectively.

In the bond market, treasuries are giving back ground following the rally seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.9 basis points at 1.788 percent.

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