WASHINGTON (dpa-AFX) - Following the mixed performances seen in the two previous sessions, the major U.S. stock indexes all showed significant moves to the upside. The Dow showed a particularly strong upward move, reaching a two-month closing high.
The major averages gave back some ground going into the end of the day but remained sharply higher. The Dow surged 1,569.40 points or 3 percent to 53,356.12, the S&P 500 jumped 119.70 points or 1.6 percent to 7,688.62 and the Nasdaq shot up 364.50 points or 1.4 percent to 25,736.51.
The rally on Wall Street came amid a positive reaction to the Democrats' decisive victory in the midterm elections on Tuesday.
Democrats are projected to win control of both the House and Senate after flipping several seats in traditionally Republican states.
President Donald Trump's apparent willingness to accept the results and work with Democrats to address political issues may have helped offset concerns about increased regulatory scrutiny under a Democrat-controlled Congress.
Several analysts also noted that a divided government, where the White House and Congress are controlled by separate parties, is often beneficial to the markets.
'The scale of the win appeared to eliminate the worst-case scenario where President Trump disputed the outcome, thereby prolonging the sort of uncertainty that investors hate,' said AJ Bell head of financial analysis Danni Hewson.
She added, 'A divided government, with Democrats controlling the Senate and House of Representatives while the Republicans occupy the White House, is the sort of gridlock scenario which historically has been positive for financial markets.
In U.S. economic news, payroll processor ADP released a report showing private sector employment in the U.S. grew by more than expected in the month of October.
The report said private sector employment climbed by 86,000 jobs in October, matching a downwardly revised increase in September.
Economists had expected private sector employment to rise by 70,000 jobs compared to the addition of 90,000 jobs originally reported for the previous month.
Meanwhile, a separate report from the Institute for Supply Management showed service sector growth saw a modest slowdown in the month of October.
The ISM said its services PMI edged down to 54.5 in October after dipping to 54.9 in September, although a reading above 50 still indicates growth. Economists had expected the index to slip to 54.7.
Sector News
Gold stocks moved sharply higher along with the price of the precious metal, with the NYSE Arca Gold Bugs Index soaring by 8.8 percent.
A nosedive by the price of crude oil also contributed to substantial strength among airline stocks, as reflected by the 7.0 percent spike by the NYSE Arca Airline Index.
Housing stocks also showed a significant move to the upside, driving the Philadelphia Housing Sector Index up by 6.1 percent.
Retail, software and brokerage stocks also saw considerable strength on the day, while energy and semiconductor stocks moved sharply lower,
Other Markets
In overseas trading, stock markets across the Asia-Pacific region once again turned in a mixed performance on Wednesday. Japan's Nikkei 225 Index slumped by 1.4 percent, while China's Shanghai Composite Index surged by 2.2 percent.
Meanwhile, the major European markets also showed strong moves to the upside on the day. While the German DAX Index shot up b 2.2 percent, the French CAC 40 Index jumped by 2 percent and the U.K.'s FTSE 100 Index advanced by 1.8 percent.
In the bond market, treasuries rebounded following the notable pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slumped 5.8 basis points to 4.894 percent.
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