Extending the rollercoaster ride seen over the past few sessions, stocks have shown a strong move to the upside in morning trading on Wednesday. The major averages have all climbed firmly into positive territory.
Currently, the major averages are off their best levels of the day but still posting strong gains. The Dow is up 331.23 points or 1 percent at 34,814.95, the Nasdaq is up 177.55 points or 1.1 percent at 15,715.24 and the S&P 500 is up 59.45 points or 1.3 percent at 4,626.45.
The rally on Wall Street comes after stocks moved sharply lower over the course of the previous session, with the Dow and the S&P 500 slumping to their lowest closing levels in at least a month.
The sharp pullback on Tuesday came following a strong upward move on Monday, which in turn followed the sell-off seen last Friday.
The recent volatility on Wall Street comes as traders have been reacting to the latest news about the Omicron variant of the coronavirus.
While news of the detection of the variant contributed to the steep drop last Friday, indications the symptoms of the variant were “extremely mild” contributed to the rebound on Monday.
However, comments from Covid-related drugmakers suggesting vaccines and treatments are less effective against Omicron contributed to yesterday’s pullback.
Traders are also keeping an eye on Federal Reserve Chair Fed Jerome Powell’s second day of Congressional testimony after he suggested yesterday that the central bank may accelerate the tapering of its bond purchases.
On the U.S. economic front, a report released by payroll processor ADP showed private sector employment increased by slightly more than expected in the month of November.
ADP said private sector employment shot up by 534,000 jobs in November after surging by a revised 570,000 jobs in October.
Economists had expected private sector employment to jump by about 525,000 jobs compared to the addition of 571,000 jobs originally reported for the previous month.
ADP chief economist Nela Richardson noted, “It’s too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months.”
The Institute for Supply Management released a separate report showing manufacturing activity grew at a slightly faster rate in the month of November.
The ISM said its manufacturing PMI crept up to 61.1 in November from 60.8 in October, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 61.0.
Steel stocks are showing a significant rebound following recent weakness, with the NYSE Arca Steel Index spiking by 3.5 percent after ending the previous session at a nearly nine-month closing low.
A rebound by the price of crude oil is also contributing to considerable strength among energy stocks. After plunging $3.77 to $66.18 a barrel on Tuesday, crude for January delivery is surging $2.55 to $68.73 a barrel.
Reflecting the strength in the energy sector, the NYSE Arca Oil Index is up by 2.9 percent and the Philadelphia Oil Service Index is up by 2.7 percent.
Housing stocks are also turning in a strong performance in morning trading, driving the Philadelphia Housing Sector Index up by 2.8 percent.
Lennar (LEN) has helped lead the sector higher, jumping by 4.8 percent after Goldman Sachs upgraded its rating on the homebuilder’s stock to Buy from Neutral.
Financial, semiconductor and chemical stocks are also seeing significant strength, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 255 Index and China’s Shanghai Composite Index both rose by 0.4 percent, while South Korea’s Kospi spiked by 2.1 percent.
The major European markets have also shown strong moves to the upside on the day. While the U.K.’s FTSE 100 Index has jumped by 1.2 percent, the German DAX Index and the French CAC 40 Index are up by 1.8 percent and 2.1 percent, respectively.
In the bond market, treasuries are giving back ground after moving notably higher in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.5 basis points at 1.478 percent.
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