WASHINGTON (dpa-AFX) - Stocks moved sharply higher over the course of the trading day on Wednesday, extending the upward move seen in the previous session. With the continued advance, the Nasdaq and the S&P 500 once again reached new record closing highs.
The major averages pulled back off their highs going into the close but held on to strong gains. The Dow spiked 454.84 points or 1.6 percent to 29,100.50, the Nasdaq jumped 116.78 points or 1 percent to 12,056.44 and the S&P 500 surged up 54.19 points or 1.5 percent to 3,580.84.
The continued strength on Wall Street partly reflected recent upward momentum, which has propelled stocks higher over the past several weeks.
The Nasdaq and S&P 500 once again set new record highs, while the Dow reached its best levels in over six months and is closing in on the record high set in February.
Traders continue to express optimism about the economy recovering from the coronavirus-induced slowdown, although some analysts have suggested the markets may be getting ahead of themselves.
Meanwhile, traders largely shrugged off a report from payroll processor ADP showing much weaker than expected private sector job growth in the month of August.
ADP said private sector employment increased by 428,000 jobs in August after rising by an upwardly revised 212,000 jobs in July.
Economists had expected employment to jump by 950,000 jobs compared to the addition of 167,000 jobs originally reported for the previous month.
'The August job postings demonstrate a slow recovery,' said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
She added, 'Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels.'
On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.
Economists currently expect employment to jump by 1.400 million jobs in August after surging up by 1.763 million jobs in July. The unemployment rate is expected to dip to 9.8 percent from 10.2 percent.
Later in the trading day, the Federal Reserve's Beige Book noted economic activity in the U.S. has increased over the past several weeks, but the gains were described as generally modest.
The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, also noted economic activity remains well below levels prior to the COVID-19 pandemic.
Sector News
Utilities stocks showed a substantial move to the upside on the day, driving the Dow Jones Utilities Average up by 3.1 percent. The average rebounded after ending the previous session at its lowest closing level in almost two months.
Significant strength was also visible among semiconductor stocks, with the Philadelphia Semiconductor Index spiking by 2.8 percent to a record closing high.
Graphics chipmaker Nvidia (NVDA) posted a strong gain after Bank of America Securities raised its price target on the company's stock to a Street-high $650 per share.
Chemical stocks also turned in a strong performance on the day, as reflected by the 2.5 percent jump by the S&P Chemical Sector Index. The index also reached a record closing high.
Computer hardware, healthcare, airline and telecom stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.
Meanwhile, energy stocks were among the few groups to buck the uptrend amid a steep drop by the price of crude oil. Crude for October delivery slumped $1.25 to $41.51 a barrel.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.5 percent, while China's Shanghai Composite Index dipped by 0.2 percent.
Meanwhile, the major European markets all moved sharply higher on the day. While the German DAX Index spiked by 2.1 percent, the French CAC 40 Index surged up by 1.9 percent and the U.K.'s FTSE 100 Index jumped by 1.4 percent.
In the bond market, treasuries saw further upside after turning higher over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.1 basis points to 0.651 percent.
Looking Ahead
Reports on weekly jobless claims, the U.S. trade deficit and service sector activity may attract attention on Thursday, although trading activity could be somewhat subdued ahead of the monthly jobs report on Friday.
Copyright RTT News/dpa-AFX