After an early move to the upside, stocks continue to turn in a strong performance in mid-day trading on Wednesday. With the upward move on the day, the Dow reached a new record intraday high earlier in the session.
Currently, the major averages are hovering firmly in positive territory. The Dow is up 155.76 points or 0.6 percent at 26,929.70, the Nasdaq is up 42.08 points or 0.5 percent at 8,041.63 and the S&P 500 is up 13.62 points or 0.5 percent at 2,937.05.
The strength on Wall Street partly reflects a positive reaction to upbeat economic data, including a report from payroll processor ADP showing stronger than expected private sector job growth in the month of September.
ADP said private sector employment jumped by 230,000 jobs in September after climbing by an upwardly revised 168,000 jobs in August.
Economists had expected employment to increase by about 185,000 jobs compared to the addition of 163,000 jobs originally reported for the previous month.
“The labor market continues to impress,” said Ahu Yildirmaz, vice president and co-head of the ADP
Research Institute. “Both the goods and services sectors soared.”
“The professional and business services industry and construction served as key engines of growth,” she added. “They added almost half of all new jobs this month.”
On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.
The report is expected to show employment climbed by about 188,000 jobs in September after jumping by 201,000 jobs in August.
A separate report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. service sector activity in September.
The ISM said its non-manufacturing index climbed to 61.6 in September from 58.5 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to dip to 58.0.
With the unexpected increase, the ISM said the non-manufacturing index reached its highest level since the inception of the composite index in 2008.
“The non-manufacturing sector has had two consecutive months of strong growth since the ‘cooling off’ in July,” said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.
“Overall, respondents remain positive about business conditions and the current and future economy,” he added. “Concerns remain about capacity, logistics and the uncertainty with global trade.”
Buying interest may also have been generated by easing concerns about the new Italian government’s spending plans, which have recently weighed on the European markets.
A report from the Italian newspaper Corriere della Sera said the government expects to reduce the budget deficit from an estimated 2.4 percent of GDP in 2019 to 2.2 percent in 2020 and 2.0 percent in 2021.
Financial stocks have shown a strong move to the upside on the day, as treasury yields have jumped following the upbeat economic data. The ten-year yield has reached its highest level in seven years.
Reflecting the strength in the financial sector, the KBW Bank Index and the NYSE Arca Broker/Dealer Index are both climbing by 1.6 percent.
Significant strength has also emerged among steel stocks, as reflected by the 1.2 percent gain being posted by the NYSE Arca Steel Index. The index has reached its best intraday level in nearly two months.
Energy stocks are also seeing notable strength amid an increase by the price of crude oil, while tobacco and gold stocks are giving back ground after spiking in the previous session.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.7 percent, while Hong Kong’s Hang Seng Index slipped by 0.1 percent.
Meanwhile, the major European markets moved to the upside on the day, although the German markets were closed for a holiday. The French CAC 40 Index and the U.K.’s FTSE 100 Index climbed by 0.4 percent and 0.5 percent, respectively.
In the bond market, treasuries are pulling back sharply following the release of the upbeat economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.3 basis points at 3.129 percent.
by RTTNews Staff Writer
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