Stocks Close Mostly Higher Amid Tech Sector Strength - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks moved mostly higher over the course of the trading day on Wednesday. The strength that emerged on Wall Street partly offset the weakness that was seen in the previous session.

The major averages moved roughly sideways going into the close, hovering in positive territory. The Dow rose 54.84 points or 0.3 percent to 17,068.71, the Nasdaq advanced 34.24 points or 0.8 percent to 4,586.52 and the S&P 500 climbed 7.25 points or 0.4 percent to 1,995.69.

The markets benefited from strength in the technology sector, as reflected by the standout gain posted by the tech-heavy Nasdaq.

Shares of Apple (AAPL) showed a notable move to the upside after seeing considerable volatility on Tuesday following the unveiling of two new versions of the iPhone as well as a new line of watches.

The gain posted Apple came despite a downgrade by Pacific Crest Securities, which said it was impressed by the new products but said they did not have enough "potential for upside estimates."

Social media giant Twitter (TWTR) also turned in a strong performance after UBS upgraded its rating on the company's stock to Buy from Neutral due to an improved outlook for digital advertising.

UBS also raised its price targets for Facebook (FB) and LinkedIn (LNKD), which also moved notably higher on the day.

Nonetheless, trading activity remained relatively subdued due to renewed uncertainty about the outlook for interest rates amid a continued sell-off in global bond markets.

Analysts continue to point to a report from the San Francisco Fed that said the public seems to expect more accommodative monetary policy than the central bank's projections suggest.

A lack of major U.S. economic data also kept some traders on the sidelines ahead of the release of some key reports over the next two days.

Sector News

Biotechnology stocks showed a substantial move to the upside over the course of the trading day, driving the NYSE Arca Biotechnology Index up by 2 percent. With the gain, the index ended the session at a new record closing high.

Pharmacyclics (PCYC) helped lead the biotech sector higher, with the biopharmaceutical company surging up by 7.7 percent to its best closing level in six months.

Significant strength also emerged among networking stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Networking Index. The index reached a two-month closing high amid strong gains by Infinera (INFN) and Arris Group (ARRS).

Airline, financial, and internet stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Meanwhile, gold stocks bucked the uptrend by the broader markets, dragging the NYSE Arca Gold Bugs Index down by 2 percent to its lowest closing level in three months.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. Hong Kong's Hang Seng Index tumbled by 1.9 percent, while China's Shanghai Composite Index fell by 0.4 percent. However, Japan's Nikkei 225 Index bucked the downtrend and rose by 0.3 percent.

Meanwhile, the major European markets ended the day almost flat. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index finished the session nearly unchanged.

In the bond market, treasuries moved moderately lower on the day, extending their recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.4 basis points to 2.534 percent.

Looking Ahead

Following several quiet days on the U.S. economic front, trading on Thursday may be impacted by reaction to the Labor Department's report on weekly jobless claims.