WASHINGTON (dpa-AFX) - After recovering from initial weakness and moving mostly higher over the course of the morning, stocks are seeing continued strength in afternoon trading on Wednesday. With the upward move, the major averages are partly offsetting the steep losses posted in the previous session.
The major averages have moved roughly sideways in recent trading, hovering in positive territory. The Nasdaq is up 80.67 points or 0.5 percent at 16,321.12, the S&P 500 is up 18.28 points or 0.4 percent at 5,224.09 and the Dow is up 52.06 points or 0.1 percent at 39,222.30.
The strength that emerged on Wall Street came following the release of a report from the Institute for Supply Management showing an unexpected slowdown in the pace of U.S. service sector growth in the month of March.
The ISM said its services PMI dipped to 51.4 in March from 52.6 in February. While a reading above 50 still indicates growth in the sector, economists had expected the index to inch up to 52.7.
Notably, the report also showed a substantial slowdown in the pace of price growth in the sector, with the prices index tumbling to 53.4 in March from 58.6 in February. The index fell to its lowest level since March 2020.
The data helped ease recent concerns about the outlook for interest rates, which contributed to the steep drop by stocks on Tuesday.
Worries the Federal Reserve may hold off on lowering interest rates also contributed to the early weakness on Wall Street after payroll processor ADP released a report this morning showing stronger than expected private sector job growth in the U.S. in the month of March.
ADP said private sector employment jumped by 184,000 jobs in March after climbing by an upwardly revised 155,000 jobs in February.
Economists had expected private sector employment to increase by 148,000 jobs compared to the addition of 140,000 jobs originally reported for the previous month.
Meanwhile, Fed Chair Jerome Powell reiterated during remarks at Stanford University that the central bank is not in a hurry to begin lowering interest rates.
Powell pointed to higher inflation data over January and February as a reason for the Fed to be cautious but acknowledged it is 'too soon to say whether the recent readings represent more than just a bump.'
'We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent,' Powell said.
He added, 'Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy.'
Despite the turnaround by the broader markets, shares of Intel (INTC) continue to see substantial weakness, with the semiconductor giant plunging by 7.3 percent.
Intel is under pressure after disclosing a $7 billion operating loss by its semiconductor manufacturing business in 2023, wider than the $5.2 billion operating loss the year before.
Sector News
Computer hardware stocks have moved sharply higher over the course of the session, driving the NYSE Arca Computer Hardware Index up by 2.3 percent.
Considerable strength also remains visible among gold stocks, as reflected by the 1.9 percent jump by the NYSE Arca Gold Bugs Index. The index has reached its best intraday level in over ten months.
The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for June delivery surging $30.60 to $2,312.30 an ounce.
An increase by the price of crude oil is also contributing to significant strength among energy stocks, while brokerage, housing and networking stocks have also moved to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.0 percent, while Hong Kong's Hang Seng Index tumbled by 1.2 percent.
Meanwhile, the major European markets moved to the upside on the day. While the German DAX Index climbed by 0.5 percent, the French CAC 40 Index rose by 0.3 percent and the U.K.'s FTSE 100 Index closed just above the unchanged line.
In the bond market, treasuries have bounced back near the unchanged after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 4.367 percent after reaching a high of 4.429 percent.
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