Dow, S&P 500 Reach New Record Highs On Broad Based Rally - U.S. Commentary

(RTTNews) - After initially showing a lack of direction stocks moved sharply higher over the course of the trading session on Wednesday. With the upward move on the day, the Dow and the S&P 500 once again reached new record closing highs.

The major averages ended the session near their best levels of the day. The Dow soared 297.84 points or 1.6 percent to 19,549.62, the Nasdaq jumped 60.76 points or 1.1 percent to 5,393.76 and the S&P 500 surged up 29.12 points or 1.3 percent to 2,241.35.

The strength that emerged on Wall Street came as traders looked ahead to the European Central Bank's monetary policy announcement on Thursday.

The ECB is expected to extend its asset purchase program beyond March of 2017 amid the recent political turmoil in Europe following the referendum in Italy.

Next week's Federal Reserve meeting also remains in focus, with the Fed widely expected to raise interest rates by a quarter point.

The rally by stocks also reflected a continuation of the upward momentum seen following President-elect Donald Trump's surprise victory last month.

Among individual stocks, shares of Dave & Buster's (PLAY) moved sharply higher after the restaurant chain reported better than expected third quarter results and raised its full-year guidance.

Hard drive maker Western Digital (WDC) also posted a standout gain after raising its second quarter earnings and revenue outlook.

On the other hand, shares of Sigma Designs (SIGM) came under pressure after the chip maker reported better than expected third quarter earnings but on revenues that missed estimates.

Sector News

Most of the major sectors showed notable move to the upside on the day, reflecting broad based buying interest on Wall Street.

Steel stocks posted particularly strong gains, resulting in a 3 percent jump by the NYSE Arca Steel Index. With the advance, the index reached its best closing level in two years.

L.B. Foster (FSTR), Rio Into (RTP) and Universal Stainless (USAP) turned in some of the steel sector's best performances.

Significant strength was also visible among transportation stocks, as reflected by the 2.5 percent gain posted by the Dow Jones Transportation Average. The gain lifted the average to a record closing high.

Computer hardware, housing, telecom and semiconductor stocks also saw notable strength on the day, while biotechnology stocks bucked the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index rose by 0.6 percent.

The major European markets also showed strong moves to the upside on the day. While the French CAC 40 Index surged up by 1.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index jumped by 1.8 percent and 2 percent, respectively.

In the bond market, treasuries moved higher after closing roughly flat in the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.9 basis points to 2.347 percent.

Looking Ahead

Trading on Thursday is likely to be driven to reaction to the ECB announcement along with the subsequent press conference by ECB President Mario Draghi.

The news out of Europe will likely overshadow the release of the Labor Department's report on weekly jobless claims.