U.S. Close Narrowly Mixed Following Volatile Trading Session

Following the sell-off seen during Tuesday’s session, stocks saw substantial volatility over the course of the trading day on Wednesday. The major averages spent the day showing wild swings back and forth across the unchanged line.

The major averages eventually ended the day narrowly mixed. While the Dow slipped 68.61 points or 0.2 percent to a new three-month closing low of 33,550.27, the S&P 500 crept up 0.98 points or less than a tenth of a percent to 4,274.51 and the Nasdaq rose 29.24 points or 0.2 percent to 13,092.85.

The volatility on Wall Street came as some traders made another attempt at bargain hunting following yesterday’s sell-off but concerns about the outlook for interest rates continue to hang over the markets.

Recent comments from the likes of JPMorgan Chase (JPM) CEO Jamie Dimon and Minneapolis Federal Reserve President Neel Kashkari have led to worries the Federal Reserve may raise rates higher than previously anticipated.

In U.S. economic news, the Commerce Department released a report unexpectedly showing a modest rebound in new orders for U.S. manufactured durable goods in the month of August.

The Commerce Department said durable goods orders crept up by 0.2 percent in August after plunging by a revised 5.6 percent in July.

The uptick surprised economists, who had expected durable goods orders to fall by 0.5 percent compared to the 5.2 percent nosedive that had been reported for the previous month.

Excluding a modest decrease in orders for transportation equipment, durable goods orders rose by 0.4 percent in August after inching up by a downwardly revised 0.1 percent in July.

Economists had expected ex-transportation orders to edge up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.

“A positive surprise with durable goods data was initially viewed as good news for the economy and possibly stocks, but good news is actually bad news for equities,” said Edward Moya, senior market analyst at OANDA.

“Signs of economic resilience will move the needle in possibly making the Fed deliver more rate hikes,” he added. “Also weighing on equities is the harsh reality that a tight oil market is not going away and that will be a major headache for the economy.”

Sector News

While most of the major sectors showed only modest moves on the day, energy stocks saw substantial strength amid a sharp increase by the price of crude oil.

With crude for November delivery soaring $3.29 to $93.68 a barrel amid concerns about tight supplies, the Philadelphia Oil Service Index spiked by 3.4 percent and the NYSE Arca Oil Index surged by 2.4 percent.

A significant increase in the price of natural gas also contributed to strength among associated stocks, driving the NYSE Arca Natural Gas Index up by 1.6 percent.

On the other hand, gold stocks saw considerable weakness, dragging the NYSE Arca Gold Bugs Index down by 3.3 percent to a ten-month closing low.

The sell-off by gold stocks came amid a sharp drop by the price of the precious metal, with gold for December delivery tumbling $28.90 to $1,890.90 an ounce.

Notable weakness was also visible among interest rate-sensitive utilities stocks, as reflected by the 1.5 percent loss posted by the Dow Jones Utility Average. With the drop, the average fell its lowest closing level in over two years.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both edged up by 0.2 percent.

Meanwhile, the major European markets moved to the downside on the day. While the French CAC 40 Index closed just below the unchanged line, the German DAX Index and the U.K.’s FTSE 100 Index fell by 0.3 percent and 0.4 percent, respectively.

In the bond market, treasuries showed a substantial downturn over the course of the session after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.8 basis points at 4.626 percent after hitting a low of 4.491 percent.

Looking Ahead

While reports on weekly jobless claims and pending home sales may attract attention on Thursday, traders may be reluctant to make significant moves ahead of remarks by Fed Chair Jerome Powell due to begin at the close of trading.

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