Stocks Close Mostly Higher Following Morning Volatility - U.S. Commentary

(RTTNews) - After showing a lack of direction throughout morning trading on Wednesday, stocks moved mostly higher over the course of the session. With the upward move on the day, the tech-heavy Nasdaq reached its best closing level since 2000.

The major averages ended the day firmly in positive territory but off their highs for the session. The Dow climbed 88.68 points or 0.5 percent to 18,038.27, the Nasdaq rose 21.07 points or 0.4 percent to 5,035.17 and the S&P 500 advanced 10.67 points or 0.5 percent to 2,107.96.

The strength that emerged on Wall Street partly reflected a positive reaction to earnings news from some big-name companies.

Fast food giant McDonald's (MCD) moved notably higher on the day even though the company reported first quarter net income and sales that fell year-over-year.

Traders seemed to react positively to a statement from McDonald's CEO Steve Easterbrook regarding the announcement of the first steps of a turnaround plan next month.

Coca-Cola (KO) also moved to the upside on the day after the beverage giant reported first quarter earnings that beat expectations on its first revenue growth in two years.

Additionally, credit card giants Visa (V), MasterCard (MA) and American Express (AXP) turned in strong performances on news that China will open its market for clearing domestic bank card transactions.

Reuters said the move will allow the credit card companies direct access to a market valued at $6.84 trillion last year. Positive sentiment may also have been generated by a report from the National Association of Realtors showing that existing home sales increased by much more than expected in the month of March.

NAR said existing home sales surged up 6.1 percent to an annual rate of 5.19 million in March after rising 1.5 percent to a revised 4.89 million in February. Economists had expected existing home sales to climb to a rate of 5.05 million.

With the bigger than expected increase, existing home sales rose to their highest level since reaching a matching rate in September of 2013.

On the other hand, online media giant Yahoo (YHOO) and aerospace giant Boeing (BA) moved to the downside after reporting their quarterly results.

Sector News

Despite the notably higher close by the broader markets, many of the major sectors ended the day showing only modest moves.

Steel stocks saw significant strength, however, with the NYSE Arca Steel Index surging up by 2.5 percent. Gerdau (GBB) and Rio Tinto (RTP) posted standout gains.

Considerable strength also emerged among railroad stocks, as reflected by the 1.6 percent gain posted by the Dow Jones Railroads Index. With the gain, the index reached its best closing level in a month.

Brokerage and semiconductor stocks also moved notably higher on the day, while substantial weakness remained visible among gold stocks.

The weakness among gold stocks came amid a sharp drop by the price of the precious metal, with gold for June delivery falling $16.20 to $1,186.90 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index surged up by 1.1 percent, while Australia's All Ordinaries Index dropped by 0.5 percent.

The major European markets also turned mixed over the course of the session. While the French CAC 40 Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index fell by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries extended the pullback seen over the past few days on the heels of the upbeat existing home sales data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced by 5.6 basis points to 1.972 percent.

Looking Ahead

Trading on Thursday may be impacted by the latest batch of earnings news, as AT&T (T), eBay (EBAY), Facebook (FB), and Qualcomm (QCOM) are among the companies releasing their quarterly results after the close of today's trading.

3M (MMM), Caterpillar (CAT), General Motors (GM), Hershey (HSY), PepsiCo (PEP), and Procter & Gamble (PG) are also due to report their results before the start of trading on Thursday.

Economic data may also attract some attention, with traders likely to keep an eye on reports on weekly jobless claims and new home sales.