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19.07.2017 22:18:10

Major Averages Climb To New Record Closing Highs - U.S. Commentary

(RTTNews) - Following the mixed performance seen in the previous session, stocks moved mostly higher during trading on Wednesday. With the upward move on the day, all three major averages reached new record closing highs.

The major averages finished the day firmly in positive territory. The Dow rose 66.02 points or 0.3 percent to 21,640.75, the Nasdaq advanced 40.74 points or 0.6 percent to 6,385.04 and the S&P 500 climbed 13.22 points or 0.5 percent to 2,473.83.

Buying interest was generated in reaction to a report from the Commerce Department showing a bigger than expected rebound in housing starts in the month of June.

The report said housing starts surged up by 8.3 percent to an annual rate of 1.215 million in June from the revised May estimate of 1.122 million.

Economists had expected housing starts to rise to a rate of 1.155 million from the 1.092 million originally reported for the previous month.

The Commerce Department said building permits also jumped by 7.4 percent to a rate of 1.254 million from 1.168 million in May.

Building permits, an indicator of future housing demand, had been expected to climb to a rate of 1.200 million.

Upbeat earnings news also contributed to the strength on Wall Street, with financial giant Morgan Stanley (MS) posting a strong gain after reporting better than expected second quarter results.

Meanwhile, a notable drop by IBM (IBM) limited the upside for the Dow after the tech giant reported better than expected second quarter earnings but weaker than expected revenues.

Sector News

Energy stocks saw substantial strength on the day, benefiting from an increase by the price of crude oil. Crude for August delivery climbed $0.72 to $47.12 a barrel following the release of a report showing a bigger than expected weekly drop in crude oil inventories.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 4.3 percent, the NYSE Arca Natural Gas Index jumped by 2.9 percent and the NYSE Arca Oil & Gas Index advanced by 1.5 percent.

Significant strength was also visible among networking stocks, as reflected by the 2.1 percent gain posted by the NYSE Arca Networking Index. Adtran (ADTN) led the sector higher after reporting second quarter results that beat estimates.

Tobacco, steel, and biotechnology stocks also saw considerable strength on the day, while railroad stocks showed a notable move to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index climbed by 0.6 percent.

The major European markets also moved to the upside on the day. While the German DAX Index crept up by 0.2 percent, the U.K.'s FTSE 100 Index rose by 0.6 percent and the French CAC 40 Index advanced by 0.8 percent.

In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.268 percent.

Looking Ahead

Monetary policy announcements by the Bank of Japan and the European Central Bank may attract attention on Thursday.

Traders are also likely to keep an eye on reports on weekly jobless claims, leading economic indicators, and Philadelphia-area manufacturing activity.

On the earnings front, Alcoa (AA), American Express (AXP), Qualcomm (QCOM) and T-Mobile US (TMUS) are among the companies releasing their quarterly results after the close of today's trading.

Abbott Labs (ABT), KeyCorp (KEY), and Travelers (TRV) are among the companies due to report their results before the start of trading on Thursday.

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