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Major Averages Posting Modest Gains In Afternoon Trading

wallstreet 12jan22 lt

After an early move to the upside, stocks have fluctuated over the course of the trading session on Wednesday but largely maintained a positive bias.

Currently, the major averages are posting modest gains. The Dow is up 65.98 points or 0.2 percent at 36,318.00, the Nasdaq is up 63.05 points or 0.4 percent at 15,216.50 and the S&P 500 is up 14.22 points or 0.3 percent at 4,727.29.

The modest strength on Wall Street comes following the release of the Labor Department's highly anticipated report on consumer price inflation in December.

While the report showed the annual rate of consumer price growth once again reached the highest level in almost 40 years, traders seem relieved the acceleration was not even more significant.

The report showed the annual rate of consumer price growth accelerated to 7.0 percent in December from 6.8 percent in November, showing the biggest yearly jump since June of 1982.

Core consumer prices, which exclude food and energy prices, were up by 5.5 percent year-over-year in December compared to the 4.9 percent spike in November. The annual growth reflected the biggest surge since February of 1991.

The continued acceleration in the annual rate of consumer price growth came as prices increased by slightly more than expected on a monthly basis, although the pace of growth slowed from November.

Treasury yields have moved to the downside following the release of the report, offsetting some of the interest rate concerns that dragged the markets lower to start the year.

Sector News

Steel stocks continue to see considerable strength following data showing easing Chinese inflation, with the NYSE Arca Steel Index jumping by 2.3 percent to its best intraday level in almost four months.

Notable strength has also emerged among natural gas stocks, as reflected by the 1.4 percent gain being posted by the NYSE Arca Natural Gas Index.

The strength in the sector comes as the price of natural gas for February delivery is surging $0.483 or 11.4 percent to $4.732 per million BTUs.

Software and oil stocks are also seeing some strength on the day, while biotechnology and pharmaceutical stocks have moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.9 percent, while Hong Kong's Hang Seng Index spiked by 2.8 percent.

The major European markets also moved to the upside on the day. While the German DAX Index rose by 0.6 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.8 percent.

In the bond market, treasuries are seeing modest strength, extending the rebound seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 1.725 percent.

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