U.S. Stocks Pull Back Off Highs But Remain Mostly Positive
After showing a strong move to the upside early in the session, stocks have given back some ground over the course of the trading day on Wednesday. The major averages have pulled back well off their highs of the session.
Currently, the major averages remain in positive territory. The Dow is up 191.67 points or 0.6 percent at 34,675.39, the Nasdaq is up 72.90 points or 0.5 percent at 15,610.59 and the S&P 500 is up 40.22 points or 0.9 percent at 4,607.22.
The early rally on Wall Street came after stocks moved sharply lower over the course of the previous session, with the Dow and the S&P 500 slumping to their lowest closing levels in at least a month.
The sharp pullback on Tuesday came following a strong upward move on Monday, which in turn followed the sell-off seen last Friday.
The recent volatility on Wall Street comes as traders have been reacting to the latest news about the Omicron variant of the coronavirus.
While news of the detection of the variant contributed to the steep drop last Friday, indications the symptoms of the variant were “extremely mild” contributed to the rebound on Monday.
However, comments from Covid-related drugmakers suggesting vaccines and treatments are less effective against Omicron contributed to yesterday’s pullback.
On the U.S. economic front, a report released by payroll processor ADP showed private sector employment increased by slightly more than expected in the month of November.
ADP said private sector employment shot up by 534,000 jobs in November after surging by a revised 570,000 jobs in October.
Economists had expected private sector employment to jump by about 525,000 jobs compared to the addition of 571,000 jobs originally reported for the previous month.
ADP chief economist Nela Richardson noted, “It’s too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months.”
The Institute for Supply Management released a separate report showing manufacturing activity grew at a slightly faster rate in the month of November.
The ISM said its manufacturing PMI crept up to 61.1 in November from 60.8 in October, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 61.0.
Most of the major sectors have pulled back off their best levels of the day, although significant strength remains visible among housing stocks, with the Philadelphia Housing Sector Index surging up by 2.2 percent.
Lennar (LEN) continues to post a standout gain, spiking by 4.6 percent after Goldman Sachs upgraded its rating on the homebuilder’s stock to Buy from Neutral.
Considerable strength also remains visible among steel stocks, as reflected by the 2.1 percent jump by the NYSE Arca Steel Index. The index ended the previous session at a nearly nine-month closing low.
Semiconductor, tobacco and pharmaceutical stocks are also seeing significant strength in afternoon trading, while airline stocks have shown a substantial move to the downside on the day.
After soaring as much as 3.4 percent in early trading, the NYSE Arca Airline Index has shown a nosedive as the day has progressed and is currently plunging by 2.1 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 255 Index and China’s Shanghai Composite Index both rose by 0.4 percent, while South Korea’s Kospi spiked by 2.1 percent.
The major European markets also showed strong moves to the upside on the day. While the U.K.’s FTSE 100 Index jumped by 1.6 percent, the French CAC 40 Index and the German DAX Index surged up by 2.4 percent and 2.5 percent, respectively.
In the bond market, treasuries have climbed back near the unchanged line after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.448 percent.
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