Stocks Close Firmly Positive Amid Jump In Oil Prices - U.S. Commentary

(RTTNews) - After ending the previous session roughly flat, stocks showed a notable move to the upside during the trading day on Wednesday. The major averages all climbed firmly into positive territory after ending Tuesday's trading on opposite sides of the unchanged line.

The major averages closed significantly higher but off their best levels of the day. The Dow advanced 182.19 points or 0.8 percent to 24,542.40, the Nasdaq jumped 73.00 points or 1 percent to 7,339.90 and the S&P 500 surged up 25.87 points or 1 percent to 2,697.79.

The strength on Wall Street was partly due to a sharp increase by the price of crude oil following President Donald Trump's decision to withdraw from the Iran nuclear deal.

Trump harshly criticized the nuclear agreement with Iran in remarks from the White House and signed a memorandum re-imposing sanctions on Iran.

"I am announcing today that the United States will withdraw from the Iran nuclear deal," Trump said. "We will be instituting the highest level of economic sanctions."

"The United States no longer makes empty threats," added Trump, who criticized the deal throughout his presidential campaign. "When I make promises, I keep them."

Energy stocks moved significantly higher along with the price of crude oil, as crude for June delivery spiked $2.08 to $71.14 a barrel.

Reflecting the strength in the energy sector, the NYSE Arca Oil & Gas Index surged up by 2.4 percent, the Philadelphia Oil Service Index jumped by 2.2 percent and the NYSE Arca Natural Gas Index advanced by 1.4 percent.

Significant strength was also visible among chemical stocks, as reflected by the 1.7 percent gain posted by the S&P Chemical Sector Index. The index reached its best closing level in well over a month.

Financial, biotechnology and semiconductor stocks also saw notable strength on the day, while housing and utilities stocks moved to the downside.

On the U.S. economic front, the Labor Department released a report showing a modest uptick in producer prices in the month of April.

The Labor Department said its producer price index for final demand inched up by 0.1 percent in April after rising by 0.3 percent in March. Economists had expected prices to edge up by 0.2 percent.

Excluding food and energy prices, core producer prices rose by 0.2 percent in April after climbing by 0.3 percent in the previous month. The increase in core prices matched economist estimates.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. While Japan's Nikkei 225 Index fell by 0.4 percent, Hong Kong's Hang Seng Index rose by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index jumped by 1.3 percent, the German DAX Index and the French CAC 40 Index are both edged up by 0.2 percent.

In the bond market, treasuries extended the downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.5 basis points to 3.004 percent.

Trading on Thursday may be impacted by reaction to reports on consumer prices and weekly jobless claims as well as the latest batch of earnings news.