Stocks moved sharply higher at the start of trading on Wednesday, benefiting from some upbeat economic data as well as optimism about a summit of European leaders. The major averages showed notable moves to the upside after moving sharply lower over the course of the previous session.
The major averages have recently pulled back off their highs for the young session but remain firmly positive. The Dow is up 133.96 points or 1.1 percent at 11,840.58, the Nasdaq is up 19.84 points or 0.8 percent at 2,658.26 and the S&P 500 is up 11.17 points or 0.9 percent at 1,240.22.
The initial strength on Wall Street was partly due to the release of a report from the Commerce Department showing a smaller than expected drop in durable goods orders in the month of September, with the decrease largely due to weakness in the volatile transportation sector.
The report showed that durable goods orders fell by 0.8 percent in September after edging down by 0.1 percent in August. Economists had been expecting orders to show a more notable 1.0 percent drop.
Excluding a 7.5 percent decrease in orders for transportation equipment, durable goods orders actually jumped by 1.7 percent in September, far exceeding economist estimates for a 0.5 percent increase.
The report also showed a jump in orders for non-defense capital goods excluding aircraft, which is seen as an indicator of business spending.
The markets are also benefiting from optimism that a meeting of European leaders in Brussels will result in an agreement on the steps needed to resolve the regional debt crisis. Ahead of the meeting, Germany’s lower house of parliament approved a motion to strengthen the euro zone rescue fund.
Upbeat earnings news is also contributing to the strength on Wall Street, with aerospace giant Boeing (BA) jumping by 5.2 percent after reporting better than expected third quarter earnings and raising its full year earnings guidance.
Ford (F) also reported third quarter earnings that exceeded analyst estimates, but the auto giant did not announce a decision regarding reinstating its dividend, as many investors had expected.
Steel stocks are turning in some of the market’s best performances in early trading after coming under pressure in the previous session. The NYSE Arca Steel Index is advancing by 2.3 percent after falling by 3.8 percent on Tuesday.
Health insurance, airline, housing, and gold stocks have also shown notable moves to the upside, with gold stocks benefiting from an increase by the price of the precious metal. On the other hand, some trucking and retail stocks are bucking the uptrend.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Wednesday, although the Japan’s Nikkei 225 Index bucked the uptrend. While the Nikkei 225 Index edged down by 0.2 percent, Hong Kong’s Hang Seng Index rose by 0.5 percent.
The major European markets are also moving to the upside on the day despite uncertainty about the outcome of the leaders summit. The U.K.’s FTSE 100 Index is up by 0.7 percent, while the French CAC 40 Index and the German DAX Index are up by 1.1 percent and 1.2 percent, respectively.
In the bond market, treasuries are seeing modest weakness amid the rebound on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 2.155 percent.