Late-Day Pullback Leads To Mixed Close On Wall Street

Stocks moved notably higher over the course of the trading session on Wednesday before giving back ground going into the close. The major averages pulled back sharply in late-day trading, with the tech-heavy Nasdaq sliding into negative territory.

The major averages subsequently finished the session mixed. While the Nasdaq fell 33.56 points or 0.5 percent to 7,384.30, the Dow surged up 495.64 points or 2.4 percent to 21,200.55 and the S&P 500 jumped 28.23 points or 1.2 percent to 2,475.56.

The Dow held on to a strong gain partly due to a substantial advance by shares of Boeing (BA), which spiked by 24.3 percent after a report from Reuters said the aerospace giant plans to restart 737 MAX production by May.

Fellow Dow component Nike (NKE) also moved sharply higher after the athletic footwear and apparel maker reported better than expected fiscal third quarter results and said sales in China have rebounded since the coronavirus outbreak in the country has eased.

The late-day pullback on Wall Street came amid a dispute between Senator Bernie Sanders, I-Vt., and several Republican Senators that could delay a massive stimulus package.

Sanders said he is prepared to put a hold on the legislation unless the GOP Senators drop their objections to fast-tracking the bill over a provision that would increase maximum unemployment benefits by $600 a week for four months.

Stocks moved sharply higher earlier in the session in reaction to news that Senate leaders and the White House have reached an agreement on the $2 trillion stimulus bill.

Senate Majority Leader Mitch McConnell, R-Ken., announced the agreement very early this morning, saying he expects the legislation to pass later today.

McConnell described the bill as a “war-time level of investment” in the country, providing financial assistance to individuals and companies amid the ongoing coronavirus pandemic.

The Republican leader’s Democratic counterpart, Senate Minority Leader Chuck Schumer, D-N.Y., also praised the bill, which he said would provide “unemployment compensation on steroids.”

Schumer also claimed the final bill would provide increased oversight of a proposed $500 billion corporate bailout fund, which had been a key sticking point among Democrats.

The Senate could pass the bill as soon as today, although the stimulus package would still need to be approved by the Democrat-controlled House before heading to President Donald Trump’s desk.

Sector News

Despite the late-day pullback by the broader markets, substantial strength remained visible among housing stocks.

Reflecting the strength in the sector, the Philadelphia Housing Sector Index spiked by 9.6 percent, climbing further off the five-year closing low set on Monday.

Oil stocks also showed a significant move to the upside on the day, driving the NYSE Arca Oil Index up by 6.5 percent. The strength in the sector came as the price of crude oil closed higher for the third straight day.

Brokerage, steel, utilities and gold stocks also saw considerable strength on the day, while retail and semiconductor stocks showed notable moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Wednesday. Japan’s Nikkei 225 Index soared by 8 percent, while Hong Kong’s Hang Seng Index surged up by 3.8 percent.

The major European markets also finished a volatile session showing strong moves to the upside. While the German DAX Index jumped by 1.8 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index both spiked by 4.5 percent,

In the bond market, treasuries showed a lack of direction before ending the day in the red. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.2 basis points to 0.858 percent.

Looking Ahead

Traders have recently shrugged off U.S. economic data as old news, but a report on weekly jobless claims scheduled to be released on Thursday may actually attract some attention, as it will be among the first data points to reflect the impact of the coronavirus outbreak.

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