U.S. Stocks Regain Ground After Early Move To The Downside

After moving to the downside early in the session, stocks have regained ground over the course of the trading day on Wednesday. The major averages have climbed well off their early lows, with the Nasdaq and the S&P 500 reaching positive territory.

Currently, the major averages are narrowly mixed. While the Dow is down 60.28 points or 0.2 percent at 35,753.52, the Nasdaq is up 22.79 points or 0.1 percent at 15,797.93 and the S&P 500 is up 2.33 points or 0.1 percent at 4,693.03.

The early weakness on Wall Street came amid a continued increase in U.S. treasury yields, with the yield on the benchmark ten-year note reaching its highest intraday level in six months.

Yields were extending the upward move seen since President Joe Biden announced his intent to re-nominate Federal Reserve Chair Jerome Powell amid concerns the central bank could accelerate plans to tighten monetary policy.

A Labor Department report showing first-time claims for U.S. unemployment benefits slid to their lowest level in over fifty years in the week ended November 20th helped push yields higher.

The Labor Department said initial jobless claims tumbled to 199,000, a decrease of 71,000 from the previous week’s revised level of 270,000.

Economists had expected jobless claims to edge down to 260,000 from the 268,000 originally reported for the previous week.

With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 197,000 in November of 1969.

Yields have shown a notable downturn over the course of the trading day, however, with the pullback contributing to the recovery attempt on Wall Street.

The volatility in the bond market comes amid the release of slew of U.S. economic data in addition to the weekly jobless claims report.

The Commerce Department released separate reports showing an unexpected drop in durable goods orders but an increase in new home sales in the month of October.

Another Commerce Department showed personal income and spending both increased by more than expected during the month.

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Computer hardware stocks have shown a substantial move to the upside, however, with the NYSE Arca Computer Hardware Index jumping by 3 percent to a five-month intraday high.

HP Inc. (HPQ) is leading the sector higher after the computer and printer maker reported fiscal fourth quarter results that beat expectations and raised its first quarter guidance.

Significant strength has also emerged among tobacco stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Tobacco Index.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index tumbled by 1.6 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.4 percent, the French CAC 40 Index is up by 0.1 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent.

In the bond market, treasuries have shown a notable turnaround after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 1.651 percent after reaching a high of 1.693 percent.

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