U.S. Stocks Seeing Further Upside As Treasury Yields Extend Pullback

Stocks are seeing modest strength during trading on Wednesday, extending the upward move seen over the past few days. The major averages are moving higher for the fourth consecutive session.

Currently, the major averages are off their highs of the session but still in positive territory. The Dow is up 65.10 points or 0.2 percent at 33,804.40, the Nasdaq is up 89.11 points or 0.7 percent at 13,651.95 and the S&P 500 is up 10.69 points or 0.3 percent at 4,368.93.

The strength on Wall Street comes amid a continued decline by treasury yields, with yields pulling back further off their highest levels in over sixteen years.

Treasuries have recently benefited from their appeal as a safe haven amid the deadly conflict between Hamas and Israel.

Meanwhile, traders have largely shrugged off a Labor Department report showing producer prices in the U.S. increased by slightly more than expected in the month of September.

The Labor Department said its producer price index for final demand climbed by 0.5 percent in September after advancing by 0.7 percent in August. Economists had expected prices to rise by 0.4 percent.

The producer price growth was partly due to a continued surge in energy prices, which spiked by 3.3 percent in September after skyrocketing by 10.3 percent in August.

The report also said the annual rate of producer price growth accelerated to 2.2 percent in September from a revised 2.0 percent in August.

Economists had expected the pace of price growth to come in unchanged compared to the 1.6 percent originally reported for the previous month.

“Officials are committed to reigning in inflation, but we expect prices to slow enough over the coming quarters to keep additional rate hikes off the table,” said Matthew Martin, U.S. Economist at Oxford Economics.

On Thursday, the Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of September.

Sector News

Gold stocks have shown a strong move to the upside on the day, resulting in a 1.3 percent gain by the NYSE Arca Gold Bugs Index.

The strength among gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery climbing $8.30 to $1,883.60 an ounce.

Notable strength is also visible among commercial real estate stocks, as reflected by the 1.2 percent gain being posted by the Dow Jones U.S. Real Estate Index.

Computer hardware, pharmaceutical and airline stocks are also seeing strength on the day, while oil stocks are moving lower along with the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index advanced by 0.6 percent, while Hong Kong’s Hang Seng Index jumped by 1.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.1 percent, the U.K.’s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is down by 0.4 percent.

In the bond market, treasuries are extending the significant rebound seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.4 basis points at 4.591 percent.

Source: Read Full Article