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U.S. Stocks Move Mostly Higher Following Bank Of England Bond Market Intervention

wallstreet aug24 28sep22 lt

After fluctuating early in the session, stocks have moved mostly higher over the course of morning trading on Wednesday. The major averages have all moved to the upside following the mixed performance seen in the previous session.

The major averages have pulled back off their highs in recent trading but currently remain positive. The Dow is up 273.93 points or 0.9 percent at 29,408.92, the Nasdaq is up 67.05 points or 0.6 percent at 10,896.55 and the S&P 500 is up 33.17 points or 0.9 percent at 3,680.46.

The strength that has emerged on Wall Street comes as traders react to the Bank of England's plans to begin temporarily purchasing long-dated U.K. government bonds to address dysfunction in the gilt market.

The BoE said the purchases would be carried out on "whatever scale is necessary" to restore orderly market conditions.

The move comes as U.K. bond yields have spiked after the government revealed its mini-budget including significant unfunded tax cuts.

Long-term U.K. bond yields have pulled back following the news, while U.S. treasury yields are also giving back ground after spiking in recent sessions.

Meanwhile, a notable decline by shares of Apple (AAPL) has limited the upside for the markets, with the tech giant tumbling by 3.5 percent.

The drop by Apple comes after a report from Bloomberg said the company is backing off plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize.

Gold stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 5.1 percent.

The rally by gold stocks comes amid a notable increase by the price of the precious metal, with gold for December delivery jumping $22.90 to $1,659.10 an ounce.

Significant strength has also emerged among housing stocks, as reflected by the 3.3 percent surge by the Philadelphia Housing Sector Index.

The index is bouncing off a three-month closing low even though the National Association of Realtors released a report showing pending home sales fell by more than expected in the month of August.

Biotechnology stocks are also turning in a strong performance, with Biogen (BIIB) leading the sector higher after a clinical trial showed the Alzheimer's drug the company is developing with Japanese partner Eisai slowed cognitive and functional decline.

Energy, pharmaceutical and retail stocks are also seeing considerable strength on the day, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.5 percent, while Hong Kong's Hang Seng Index plunged by 3.4 percent.

Meanwhile, the major European markets are little changed on the day. While the German DAX Index is marginally lower, the U.K.'s FTSE 100 Index and the French CAC 40 Index both just above the unchanged line.

In the bond market, treasuries are regaining ground after moving sharply lower over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 18.1 basis points at 3.783 percent.

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