Stocks Turn Mostly Positive Following Initial Downward Move - U.S. Commentary

(RTTNews) - Stocks have moved mostly higher over the course of the trading day on Wednesday after recovering from an early move to the downside. The major averages have bounced well off their early lows and climbed firmly into positive territory.

In recent trading, the major averages have seen some further upside, reaching new highs for the session. The Dow is up 52.79 points or 0.3 percent at 16,482.26, the Nasdaq is up 23.69 points or 0.5 percent at 4,376.53 and the S&P 500 is up 6.49 points or 0.3 percent at 1,926.70.

The strength that has emerged on Wall Street is partly due to bargain hunting following the steep drop seen over the past few sessions.

With the rebound on the day, the Dow and the S&P 500 are regaining some ground after ending the previous session at two-month closing lows.

Traders also seem to have shrugged off the concerns about the situation in Ukraine, with analysts noting that geopolitical worries are often fleeting.

Early in the session, some selling pressure was generated by news of intense fighting in the eastern Ukrainian city of Donetsk as government forces continued their offensive against pro-Russian separatists.

Polish Foreign Minister Radoslaw Sikorski has warned that Russia could launch an invasion if Ukrainian forces continue to have success in their fight against the rebels.

Traders also expressed concerns about the outlook for monetary policy following the release of a report showing an unexpectedly narrower U.S. trade deficit.

The Commerce Department report said the U.S. trade deficit narrowed to $41.5 billion in June from a revised $44.7 billion in May. The deficit had been expected to widen to $45.0 billion.

Economists noted that the unexpectedly narrower trade deficit could lead to an upward revision to the pace of GDP growth reported for the second quarter.

Sector News

Gold stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2 percent. Despite the strong gain, the index remains stuck in a recent trading range.

The strength among gold stocks comes amid a sharp increase by the price of the precious metal, with gold for December delivery jumping $24.10 to $1,309.40 an ounce.

Considerable strength has also emerged among brokerage stocks, as reflected by the 1.3 percent gain being posted by the NYSE Arca Broker/Dealer Index. FXCM Inc. (FXCM) and E*Trade (ETFC) are posting strong gains in mid-day trading.

Tobacco, networking, and energy stocks are also seeing notable strength on the day, while some weakness remains visible among telecom and utilities stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the downside during trading on Wednesday. Japan's Nikkei 225 Index fell by 1.1 percent, while Hong Kong's Hang Seng Index dipped by 0.3 percent.

The major European markets also ended the day in the red. While the French CAC 40 Index dropped by 0.6 percent, the U.K.'s FTSE 100 Index and the German DAX Index both slid by 0.7 percent.

In the bond market, treasuries are seeing modest strength after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.9 basis points at 2.464 percent.