Stocks Close Higher On Economic Data, Optimism About Greece - U.S. Commentary

(RTTNews) - After showing a lack of direction throughout much of the two previous sessions, stocks moved mostly higher during trading on Wednesday. While the major averages were unable to sustain an early rally, they managed to remain in positive territory throughout the session.

The major averages ended the day moderately higher but well off their best levels. The Dow climbed 64.33 points or 0.4 percent to 18,076.27, the Nasdaq rose 22.71 points or 0.5 percent to 5,099.23 and the S&P 500 edged up 4.47 points or 0.2 percent to 2,114.07.

The strength on Wall Street was partly due to optimism that Greece will finally reach an agreement with its international creditors.

Greek Prime Minister Alexis Tsipras is meeting with senior European officials in Brussels to discuss what is said to be the final proposal to break the stalemate.

Traders also reacted positively to a slew of U.S. economic data, including a report from payroll processor ADP showing a notable re-acceleration in the pace of private sector job growth in the month of May.

ADP said the private sector added 201,000 jobs in May following a downwardly revised increase of 165,000 jobs in April. Economists had expected an increase of about 200,000 jobs.

The Commerce Department also released a report showing that the U.S. trade deficit narrowed by more than expected in the month of April.

The report said the trade deficit narrowed to $40.9 billion in April from a revised $50.6 billion in March, while economists had expected the deficit to drop to $44.0 billion.

The narrower than expected deficit reflected a 3.3 percent decrease in the value of imports as well as a 1 percent increase in the value of exports.

Meanwhile, the Institute for Supply Management released a report showing that its index of activity in the service sector fell by more than expected in May.

The ISM said its non-manufacturing index dropped to 55.7 in May from 57.8 in April. A reading above 50 indicates continued growth in the service sector, but economists had expected the index to show a much more modest drop to a reading of 57.2.

While the index fell to its lowest level since April of 2014, analysts suggested the data continues to point to significant strength in the service strength.

Sector News

Trucking stocks saw significant strength throughout the trading session, resulting in a 2.5 percent jump by the Dow Jones Trucking Index. With the gain, the index climbed further off the seven-month closing low it set last Friday.

YRC Worldwide (YRCW) and C.H. Robinson (CHRW) posted standout gains within the trucking sector, surging up by 7.6 percent and 5.5 percent, respectively.

Considerable strength was also visible among financial stocks. The Dow Jones Banks Index climbed by 1.4 percent, while the NYSE Arca Broker/Dealer Index advanced by 1.3 percent.

On the other hand, gold stocks came under pressure on the day, dragging the NYSE Arca Gold Bugs Index down by 2 percent. The weakness in the sector came as the price of gold for August delivery fell $9.50 to $1,184.90 an ounce.

Utilities stocks also saw significant weakness, adding to the steep losses posted in the previous session. The Dow Jones Utilities Average dropped 1.5 percent to its lowest closing level in almost three months.

Notable weakness among commercial real estate and natural gas stocks also helped to limit the upside for the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.3 percent, while Australia's All Ordinaries Index slumped by 0.9 percent.

Meanwhile, the major European markets ended the day on the upside but well off their best levels. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index advanced by 0.6 percent and 0.8 percent, respectively.

In the bond market, treasuries extended the sell-off seen in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 10 basis points to a nearly seven-month high of 2.366 percent.

Looking Ahead

Reports on weekly jobless claims and labor productivity may attract some attention on Thursday, although traders are likely to be looking ahead to Friday's more closely watched monthly jobs report.