3rd Feb 2016 21:11
WASHINGTON (Alliance News) - Stocks saw substantial volatility on Wednesday, showing wild swings before ending the session mixed. The choppy trading came on the heels of the sell-off seen in the previous session.
The major averages ended the session on opposite sides of the unchanged line. While the Nasdaq fell 12.71 points or 0.3% to 4,504.24, the Dow jumped 183.12 points or 1.1% to 16,336.66 and the S&P 500 climbed 9.50 points or 0.5% to 1,912.53.
The volatility on Wall Street came as traders digested the release of a mixed batch of US economic data as well as a sharp jump by the price of crude oil.
Before the start of trading, payroll processor ADP released a report showing stronger than expected private sector job growth in the month of January.
ADP said private sector employment jumped by 205,000 jobs in January following an upwardly revised increase of 267,000 jobs in December.
Economists had expected employment to climb by about 190,000 jobs compared to the addition of 257,000 jobs originally reported for the previous month.
Meanwhile, the Institute for Supply Management released a separate report showing a slowdown in US service sector growth.
The ISM said its non-manufacturing index dropped to 53.5 in January from an upwardly revised 55.8 in December, although a reading above 50 still indicates growth in the service sector.
Economists had expected the index to inch up to 55.5 from the 55.3 originally reported for the previous month.
The notable decrease by the index raised concerns recent weakness in the manufacturing sector is spreading to the broader economy.
Sector News
Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 8.5%. With the jump, the index ended the session at its best closing level in over three months.
The rally by gold stocks came amid an increase by the price of the precious metal, with gold for April delivery climbing USD14.10 to USD1,141.20 an ounce.
Significant strength was also visible among steel stocks, as reflected by the 4.4% gain posted by the NYSE Arca Steel Index. Cliffs Natural Resources (CLF) and Mechel (MTL) turned in two of the sector's best performances.
Energy stocks also saw considerable strength amid an increase by the price of crude oil, as crude for March delivery surged up USD2.40 to USD32.28 a barrel.
Electronic storage, telecom, and chemical stocks also showed strong moves to the upside, while retail and internet stocks moved lower on the day.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index plummeted by 3.2%, while Hong Kong's Hang Seng Index slumped by 2.3%.
The major European markets also showed steep drops on the day. While the German DAX Index tumbled by 1.5%, the UK's FTSE 100 Index and the French CAC 40 Index plunged by 1.4% and 1.3%, respectively.
In the bond market, treasuries finished the session modestly lower after showing a strong move to the upside in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.7 basis points to 1.881% after hitting a low of 1.793%.
Looking Ahead
Trading on Thursday may be impacted by the release of additional US economic data, including reports on weekly jobless claims, labor productivity and costs and factory orders.
Copyright RTT News/dpa-AFX