After moving notably lower over the two previous sessions, stocks are regaining ground during trading on Wednesday. The major averages have all moved to the upside on the day but remain off the recent record highs.
Currently, the major averages are off their best levels of the day but still in positive territory. The Nasdaq is up 106.72 points or 0.7 percent at 16,046.31, the S&P 500 is up 31.29 points or 0.6 percent at 5,109.94 and the Dow is up 150.23 points or 0.4 percent at 38,735.42.
The rebound on Wall Street partly reflects a positive reaction to congressional testimony by Federal Reserve Chair Jerome Powell.
Powell told the House Financial Services Committee it will likely be appropriate for the Fed to begin lowering interest rates at “some point this year,” although he reiterated officials need “greater confidence” inflation is moving sustainably toward 2 percent.
The Fed Chief described the economic outlook as “uncertain” and said progress towards the Fed’s 2 percent inflation objective is “not assured.”
“Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2 percent,” Powell said.
He added, “At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment.”
Powell said future interest rate decisions will be based on careful assessment of the incoming data, the evolving outlook, and the balance of risks.
Meanwhile, a report released by payroll processor ADP showed private sector employment in the U.S. increased by slightly less than expected in the month of February.
ADP said private sector employment rose by 140,000 jobs in February after climbing by an upwardly revised 111,000 jobs in January.
Economists had expected private sector employment to grow by 150,000 jobs compared to the addition of 107,000 jobs originally reported for the previous month.
Sector News
Computer hardware stocks have moved sharply higher over the day, driving the NYSE Arca Computer Hardware Index up by 3.0 percent to a record intraday high.
Substantial strength is also visible among semiconductor stocks, as reflected by the 2.5 percent surge by the Philadelphia Semiconductor Index.
Gold stocks are also turning in a strong performance amid a modest increase by the price of the precious metal, resulting in a 2.0 percent jump by the NYSE Arca Gold Bugs Index.
Networking, oil service and airline stocks are also seeing notable strength on the day, while banking stocks have moved to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Hong Kong’s Hang Seng Index jumped by 1.7 percent, while Japan’s Nikkei 225 Index edged slightly lower and China’s Shanghai Composite Index fell by 0.3 percent.
Meanwhile, European stocks have modestly higher on the day. While the German DAX Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent, the French CAC 40 Index is nearly unchanged.
In the bond market, treasuries are extending the strong upward move 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 2.7 basis points at 4.110 percent.
Business News
U.S. Stocks Regaining Ground Following Powell Testimony
2024-03-06 15:58:44
