Major Averages Climbing To New Highs For The Session

Stocks moved mostly higher early in the session and continue to turn in a strong performance in afternoon trading on Wednesday. The major averages are adding to the modest gains posted in the previous session, with the S&P 500 reaching a new record intraday high.

In recent trading, the major averages have reached new highs for the session. The S&P 500 is up 42.35 points or 0.9 percent at 4,996.58, the Nasdaq is up 145.85 points or 0.9 percent at 15,754.85 and the Dow is up 209.97 points or 0.6 percent at 38,731.33.

The strength on Wall Street may partly reflect recent upward momentum, which contributed to a substantial rally late last week despite waning optimism about the Federal Reserve cutting interest rates in March.

While CME Group’s FedWatch Tool suggests the chances of March rate cut are just 20.5 percent, the Fed is still expected to begin lowering rates sometime in the coming months.

Recent upbeat economic data has seemingly reduced the likelihood of a near-term rate cut but a strong economy is still seen as a net positive for stocks.

A positive reaction to some of the latest earnings news has also contributed to notable advance seen over the course of the session.

Share of Enphase Energy (ENPH) are soaring by 20.1 percent after the solar inverter maker reported weaker than expected fourth quarter revenues but said it expects demand to improve throughout 2024.

Auto giant Ford (F) has also surged by 4.9 percent after reporting better than expected fourth quarter results, providing upbeat guidance for 2024 and announcing a supplemental dividend of 18 cents per share.

On the other hand, shares of Snap (SNAP) have plummeted by 35.9 percent after the Snapchat parent reported mixed fourth quarter results and forecast first quarter sales below analyst estimates.

“We’re hip deep in company earnings and so far investors have been somewhat relieved that for the most part the news has been pretty positive in a season that had a big question mark hanging over it,” says Danni Hewson, head of financial analysis at AJ Bell.

In U.S. economic news, the Commerce Department released a report this morning showing the U.S. trade deficit widened in the month of December.

The Commerce Department said the trade deficit increased to $62.2 billion in December from a revised $61.9 billion in November.

Economists had expected the trade deficit to narrow to $62.2 billion from the $63.2 billion originally reported for the previous month.

Sector News

Software stocks continue to see significant strength on the day, driving the Dow Jones U.S. Software Index up by 1.8 percent to a record intraday high.

Considerable strength also remains visible among housing stocks, as reflected by the 1.5 percent gain being posted by the Philadelphia Housing Sector Index.

Semiconductor stocks are also seeing a notable rebound after moving sharply lower on Tuesday, while biotechnology stocks have moved to the downside on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. China’s Shanghai Composite Index surged by 1.4 percent, while Hong Kong’s Hang Seng Index dipped by 0.3 percent and Japan’s Nikkei 225 Index edged down by 0.1 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index fell by 0.4 percent, the German DAX Index and the U.K.’s FTSE 100 Index both slid by 0.7 percent.

In the bond market, treasuries have shown a lack of direction over the course of the session. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 4.098 percent.