Currently, the major averages are off their highs of the session but remain firmly positive. While the Nasdaq is up 191.49 points or 1.6 percent at 12,540.24, the S&P 500 is up 35.02 points or 0.9 percent at 4,126.21 and the Dow is up 208.49 points or 0.6 percent at 32,604.66.
The strength on Wall Street partly reflects a positive reaction to some upbeat U.S. economic data, which has helped ease concerns about a recession.
A report released by the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. services sector activity in the month of July.
The ISM said its services PMI rose to 56.7 in July from 55.3 in June, with a reading above 50 indicating growth in the sector. The uptick came as a surprise to economists, who had expected the index to dip to 53.5.
The unexpected increase by the services PMI came after the index edged down to its lowest reading since May 2020 in the previous month.
‘Looking ahead, services activity will be fairly muted as hot inflation, tighter financial conditions, supply chain stress, downbeat sentiment and softening spending restrain growth,’ said Oren Klachkin, Lead US Economist at Oxford Economics.
‘The recovery’s best days are clearly in the rear-view mirror, but this doesn’t mean an economic downturn has begun,’ he added. ‘We think fundamentals are strong enough to prevent a recession this year, though the window to achieving a softish landing is narrowing.’
A separate report from the Commerce Department showed a significant increase in new orders for U.S. manufactured goods in the month of June.
The report showed factory orders shot up by 2.0 percent in June after surging by an upwardly revised 1.8 percent in May.
Economists had expected factory orders to advance by 1.1 percent compared to the 1.6 percent jump originally reported for the previous month.
Biotechnology stocks have moved sharply higher on the day, driving the NYSE Arca Biotechnology Index up by 4.4 percent to its best intraday level in over three months.
Moderna (MRNA) has helped lead the biotech sector higher, surging by 16.7 percent after reporting better than expected second quarter results.
Significant strength is also visible among airline stocks, as reflected by the 2.2 percent jump by the NYSE Arca Airline Index.
Retail, financial and commercial real estate stocks are also seeing notable strength, while gold and energy stocks are bucking the uptrend amid decreases in commodities prices.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index rose by 0.5 percent, while China’s Shanghai Composite Index slid by 0.7 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has climbed by 0.7 percent, the German DAX Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.2 percent.
In the bond market, treasuries are extending the sharp pullback seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.1 basis points at 2.812 percent.
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