Stocks Remain Firmly Positive Ahead Of Fed Minutes - U.S. Commentary

(RTTNews) - Stocks have moved notably higher during trading on Wednesday, continuing to recover from the sharp pullback seen last week. The upward move comes after choppy trading on Tuesday led to a roughly flat close for the markets.

The major averages have recently pulled back off their highs for the session but remain firmly positive. The Dow is up 123.69 points or 0.7 percent at 17,613.19, the Nasdaq is up 41.38 points or 0.8 percent at 5,027.40 and the S&P 500 is up 14.36 points or 0.7 percent at 2,064.80.

The significant strength on Wall Street partly reflects a positive reaction to news on the merger-and-acquisition front, which suggests corporate optimism.

Traders are also looking ahead to this afternoon's release of the minutes of the Federal Reserve's latest monetary policy meeting.

The minutes of the meeting are likely to be closely analyzed for hints regarding whether the Fed will raise interest rates next month.

The Fed left rates unchanged following the October meeting, but the accompanying statement was interpreted as pointing to an impending rate hike.

On the U.S. economic front, the Commerce Department released a report before the start of trading showing that U.S. housing starts fell by much more than expected in the month of October.

The report said housing starts tumbled by 11.0 percent to an annual rate of 1.060 million in October from the revised September estimate of 1.191 million.

Economists had expected housing starts to fall to a rate of 1.162 million from the 1.206 million originally reported for the previous month.

Meanwhile, the Commerce Department said building permits, an indicator of future housing demand, climbed 4.1 percent to an annual rate of 1.150 million from the revised September rate of 1.105 million.

Sector News

Railroad stocks are seeing substantial strength in mid-day trading, resulting in a 3.7 percent jump by the Dow Jones Railroads Index. With the gain, the index is on pace to end the session at its best closing level in almost a month.

Norfolk Southern (NSC) and Canadian Pacific (CP) are posting standout gains in the railroad sector after the latter revealed details of its offer to acquire the former.

Significant strength is also visible among steel stocks, as reflected by the 2.8 percent gain being posted by the NYSE Arca Steel Index. The index is rebounding after ending the previous session at its lowest closing level in well over a month.

Housing, health care, and banking stocks are also seeing notable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index fell by 0.3 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index crept up by 0.2 percent, the German DAX Index edged down by 0.1 percent and the French CAC 40 Index dropped by 0.6 percent.

In the bond market, treasuries are seeing modest weakness after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 2.278 percent.