Modest Strength On Wall Street Lifts S&P 500 To New High - U.S. Commentary

(RTTNews) - Stocks showed a lack of direction throughout much of the trading day on Wednesday but managed to close modestly higher. The gains extended the recent upward trend by the markets, with the S&P 500 reaching a new record closing high.

The major averages closed in positive territory for the fourth consecutive session. The Dow rose 40.39 points or 0.2 percent to 16,573.00, the Nasdaq edged up 8.42 points or 0.2 percent to 4,276.46 and the S&P 500 climbed 5.38 points or 0.3 percent to 1,890.90.

The modest strength on Wall Street came following the release of some relatively upbeat economic data, including ADP's report on private sector employment.

Before the start of trading, ADP said private sector employment increased by 191,000 jobs in March following an upwardly revised increase of 178,000 jobs in February.

The job growth came in slightly shy of economist estimates, but Paul Ashworth, Chief U.S. Economist at Capital Economics, said the data still adds to other evidence that the economy is beginning to rebound after the weather-related weakness over the preceding few months.

"Data on activity and employment in March is still pretty limited," Ashworth said. "But what we know is that employment growth picked up, motor vehicle sales hit a seven-year high and consumer confidence rebounded to a six-year high."

He added, "This is exactly what we would have expected to see if the weather really was responsible for the run of weak data going back to December."

The Commerce Department also released a separate report showing that factory orders rebounded by more than expected in February after showing notable decreases in the two previous months.

The report said factory orders increased by 1.6 percent in February after falling by a revised 1.0 percent in January and tumbling by 2.0 percent in December. Economists had expected orders to rise by 1.2 percent.

Buying interest was somewhat subdued, however, as traders seemed reluctant to make any significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

Sector News

While many of the major sectors ended the day showing only modest moves, substantial strength was visible among gold stocks. The NYSE Arca Gold Bugs Index surged up by 2.8 percent, climbing further off the nearly two-month closing low set on Monday.

The strength among gold stocks came amid an increase by the price of the precious metal, as gold for June delivery climbed $10.80 to $1,290.80 an ounce.

Trucking and airline stocks also saw notable strength on the day, with the Dow Jones Trucking Index and the NYSE Arca Airline Index rising by 1.1 percent and 1 percent, respectively. The airline index reached a nearly twelve-year closing high.

Tobacco, steel, and natural gas stocks also moved to the upside, while modest weakness was visible among software stocks.

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 1 percent, while Hong Kong's Hang Seng Index ended the day up by 0.3 percent.

The major European markets also saw modest strength on the day. While the German DAX Index edged up by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both inched up by 0.1 percent.

In the bond market, treasuries showed a notable move to the downside, extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.4 basis points to 2.803 percent.

Looking Ahead

Another batch of U.S. economic data is scheduled to be released on Thursday, including reports on weekly jobless claims, international trade, and service sector activity.

However, the impact of the reports may be somewhat subdued as traders continue to look ahead to the release of the monthly jobs report on Friday.