U.S. Stocks Give Back Ground After Early Move To The Upside

After moving to the upside early in the session, stocks have given back ground over the course of the trading day on Wednesday. The major averages have pulled back well off their highs of the session but are currently posting modest gains.

The tech-heavy Nasdaq reached its best intraday level in over four months in early trading but is currently up just 8.73 points or 0.1 percent at 14,290.48. The Dow is up 28.41 points or 0.1 percent at 35,445.39 and the S&P 500 is up 5.23 points or 0.1 percent at 4,560.12.

The early strength on Wall Street partly reflected ongoing optimism about the outlook for interest rates despite conflicting remarks by Federal Reserve officials.

While Fed Governor Christopher Waller said Tuesday he is “increasingly confident that policy is currently well positioned,” Fed Governor Michelle W. Bowman said she expects further rate hikes will be needed.

Traders seem to be focusing more on the comments that reinforce expectations the Fed will leave policy unchanged until cutting rates beginning in mid-2024.

Positive sentiment was also generated in reaction to a surge by shares of General Motors (GM), with the auto giant spiking by 9.5 percent after announcing $10 billion stock buyback and increasing its dividend.

Buying interest has waned as the day has progress, however, with traders looking ahead to the release of key inflation readings on Thursday.

The Commerce Department’s report on personal income and spending includes readings on inflation said to be preferred by the Fed and could impact on the outlook for interest rates.

Sector News

Computer hardware stocks are seeing substantial strength on the day, driving the NYSE Arca Computer Hardware Index up by 3.0 percent to a record intraday high.

Data infrastructure company NetApp (NTAP) is leading the sector higher after reporting better than expected fiscal second quarter results and raising its fiscal third quarter and full-year guidance.

Significant strength is also visible among banking stocks, as reflected by the 2.1 percent surge by the KBW Bank Index. The index has reached its best intraday level in over three months.

Airline, semiconductor and housing stocks are also seeing considerable strength, while tobacco stocks have moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.

Meanwhile, most European stocks have moved to the upside on the day. While the German DAX Index has jumped by 1.1 percent and the French CAC 40 Index is up by 0.5 percent, the U.K.’s FTSE 100 Index is nearly unchanged.

In the bond market, treasuries are extending the upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.2 basis points at 4.294 percent.

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