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U.S. Stocks Regaining Ground Following Yesterday's Pullback

wallstreet aug24 08jul20 lt

Following the sharp pullback seen in the previous session, stocks have shown a strong move back to the upside in morning trading on Wednesday. The major averages have all climbed into positive territory, with the Nasdaq leading the way higher once again.

Currently, the major averages are off their best levels of the day but still firmly positive. The Nasdaq is up 115.55 points or 1.1 percent at 10,459.44, while the Dow is up 150.64 points or 0.6 percent at 26,040.82 and the S&P 500 is up 20.37 points or 0.7 percent at 3,165.69.

The markets seem to be benefiting from recent upward momentum, which led to five-day winning streaks for the Nasdaq and S&P 500 before yesterday's pullback.

The tech-heavy Nasdaq reached a new record intraday high in morning trading on Tuesday before turning lower over the course of the session.

The Nasdaq is once again benefiting from strong gains by tech giants like Apple (AAPL), which is up by 1.9 percent after Deutsche Bank raised its price target on the company's stock to $400 per share from $380 per share.

Traders also generally remain optimistic about a quick economic recovery even as the U.S. continues to see record spikes in new coronavirus cases.

In a sign of the upward momentum for the markets, the rebound on the day comes amid relatively light trading, as a lack of major U.S. economic news keeps some traders on the sidelines.

The economic calendar remains relatively light throughout the week, although reports on weekly jobless claims and producer price inflation may attract some attention in the coming days.

Gold stocks are extending the rally seen in the previous session, driving the NYSE Arca Gold Bugs Index up by 3.7 percent to its best intraday level in over seven years.

The continued strength among gold stocks comes amid an increase by the price of the precious metal, with gold for August delivery climbing $14.30 to $1,824.20 an ounce.

Substantial strength has also emerged among housing stocks, as reflected by the 2.9 percent spike by the Philadelphia Housing Sector Index.

Oil service stocks have also shown a significant move to the upside, resulting in a 1.9 percent jump by the Philadelphia Oil Service Index.

Within the sector, TechnipFMC (FTI) is posting a standout gain after signing a more than $1 billion contract for the construction of a new hydrocracking complex at an Assiut National Oil Processing refinery in Egypt.

Software, financial, and retail stocks are also seeing notable strength on the day, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.8 percent, while China's Shanghai Composite Index surged up by 1.7 percent.

Meanwhile, the major European markets have all moved to the downside for the second straight day. While the French CAC 40 Index has slumped by 0.8percent, the German DAX Index is down by 0.4 percent and the U.K.'s FTSE 100 Index is down by 0.2 percent.

In the bond market, treasuries are giving back ground after moving higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 0.663 percent.

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