U.S. Stocks Close Slightly Higher Following Lackluster Session

(RTTNews) - After recovering from an early move to the downside, stocks showed a lack of direction over the course of the trading session on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing slightly higher.

The Dow edged up 39.55 points or 0.1 percent to 42,196.52, the Nasdaq inched up 14.76 points or 0.1 percent to 17,925.12 and the S&P 500 crept up 0.79 points or less than a tenth of a percent to 5,709.54.

The early weakness on Wall Street partly reflected concerns about escalating tensions in the Middle East following Iran's ballistic missile attack against Israel on Tuesday.

While Iran has said it is not interested in a wider war, the attacks have contributed to a surge by the price of crude oil, leading to worries higher energy prices will lead to a resurgence in inflation.

Waning optimism the Federal Reserve will continue to aggressively lower interest rates also weighed on stocks after payroll processor ADP released a report showing stronger than expected private sector job growth in the month of September.

ADP said private sector employment climbed by 143,000 jobs in September after rising by an upwardly revised 103,000 jobs in August.

Economists had expected private sector employment to advance by 120,000 jobs compared to the addition of 99,000 jobs originally reported for the previous month.

Selling pressure waned shortly after the start of trading, however, as traders continued to express optimism about the outlook for the economy following the jobs data.

On Friday, the Labor Department is due to release its more closely watched report on employment in the month of September.

Economists currently expect the report to show employment rose by 140,000 jobs in September after climbing by 142,000 jobs in August, while the unemployment rate is expected to hold at 4.2 percent.

Sector News

While most of the major sectors showed only modest moves, semiconductor stocks saw a significant rebound following recent weakness, driving the Philadelphia Semiconductor Index up by 1.5 percent.

Considerable strength was also visible among networking stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Networking Index.

Computer hardware and energy stocks also saw strength on the day, while airline and housing stocks moved to the downside.

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 plunged by 2.2 percent, while Hong Kong's Hang Seng Index spiked by 6.2 percent.

The major European markets also ended the day mixed. While the German DAX Index fell by 0.3 percent, the French CAC 40 Index inched up by 0.1 percent and the U.K.'s FTSE 100 Index rose by 0.2 percent.

In the bond market, treasuries gave back ground following the strength seen in the previous session. As result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.2 basis points to 3.785 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to the latest U.S. economic data, including reports on weekly jobless claims, service sector activity and factory orders.