WASHINGTON (dpa-AFX) - Stocks have shown a strong move back to the upside in morning trading on Wednesday, offsetting the pullback seen in the previous session. The major averages moved sharply higher early in the session and have remained firmly positive.
Currently, the major averages are off their highs of the session but holding on to strong gains. The Dow is up 204.83 points or 0.8 percent at 26,167.27, the Nasdaq is up 72.85 points or 0.9 percent at 8,021.41 and the S&P 500 is up 21.27 points or 0.7 percent at 2,921.78.
The initial strength on Wall Street reflected s positive reaction to upbeat earnings news from retail giants Target (TGT) and Lowe's (LOW), which are surging up by 18.8 percent and 10.7 percent, respectively.
Target and Lowe's reported quarterly results that exceeded analyst estimates on both the top and bottom lines, with Target also raising its full-year earnings guidance.
The better than expected results from the retailers have added to optimism that strength in consumer spending will continue to support the U.S. economy despite early indicators of a looming recession.
Positive sentiment has also been generated by a report from the National Association of Realtors showing a notable rebound in existing home sales in the month of July.
NAR said existing home sales jumped by 2.5 percent to an annual rate of 5.42 million in July after slumping by 1.3 percent to a revised rate of 5.29 million in June.
Economists had expected existing home sales to surge up by 2.3 percent to a rate of 5.39 million from the 5.27 million originally reported for the previous month.
'Falling mortgage rates are improving housing affordability and nudging buyers into the market,' said NAR chief economist Lawrence Yun.
Meanwhile, traders are also looking ahead to the release of the minutes of the Federal Reserve's latest monetary policy announcement this afternoon.
The minute of the Fed's late-July meeting are scheduled to be released at 2 pm ET and may shed additional light on the outlook for interest rates.
The Fed cut interest rates by 25 basis points last month and CME Group's FedWatch tool currently indicates a 98.1 percent chance of another 25 basis point rate cut in September.
Fed Chairman Jerome Powell suggested that the July rate cut should not be seen as 'the beginning of a lengthy cutting cycle,' but President Donald Trump has been putting intense pressure on the Fed to continue cutting rates.
With Target and Lowe's leading the way higher, retail stocks have shown a significant move to the upside in morning trading. Reflecting the strength in the sector, the Dow Jones U.S. Retail Index has surged up by 1.7 percent.
Computer hardware, software, and networking stocks are also seeing notable strength, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index rose by 0.2 percent.
Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the French CAC 40 Index has surged up by 1.6 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both up by 1.2 percent.
In the bond market, treasuries are showing a lack of direction ahead of the release of the Fed minutes. 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 1.567.
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