U.S. Stocks Move Higher After Initially Showing A Lack Of Direction

After initially showing a lack of direction, stocks have moved mostly higher over the course of the morning trading on Wednesday. The major averages have climbed more firmly into positive territory after bouncing back and forth across the unchanged line in early trading.

The major averages have pulled back off their highs in recent trading but currently remain positive. The Dow is up 85.19 points or 0.3 percent at 31,190.16, the Nasdaq is up 82.93 points or 0.7 percent at 11,716.50 and the S&P 500 is up 17.54 points or 0.5 percent at 3,950.23.

The strength that has emerged on Wall Street comes following the sharp pullback seen in the previous session, which nearly wiped out their recent recovery rally.

Traders may once again be looking to pick up stocks at reduced levels, although concerns about the outlook for interest rates continue to weigh on the markets after yesterday’s hotter-than-expected consumer price inflation report.

Partly offsetting the inflation worries, the Labor Department released a separate report this morning showing a modest decrease in U.S. producer prices in the month of August.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after falling by a revised 0.4 percent in July.

Economists had expected producer prices to dip by 0.1 percent compared to the 0.5 percent drop originally reported for the previous month.

The report also showed the annual rate of growth in producer prices slowed to 8.7 percent in August from 9.8 percent in July, roughly in line with estimates.

Nonetheless, traders may be reluctant to make significant moves ahead of the release of a slew of U.S. economic data on Thursday, including reports on weekly jobless claims, retail sales and industrial production.

Natural gas stocks have moved sharply higher on the day, driving the NYSE Arca Natural Gas Index up by 3.4 percent.

The rally by natural gas stocks comes amid a sharp increase by the price of the commodity, with natural gas for October delivery surging $0.431 or 5.2 percent to $8.715 per million BTUs.

A notable increase by the price of crude oil is also contributing to significant strength among oil service and oil producer stocks.

With crude for October delivery jumping $1.89 to $89.20 a barrel, the Philadelphia Oil Service Index and the NYSE Arca Oil Index are up by 2.9 percent and 2.8 percent, respectively.

Gold, semiconductor and utilities stocks have also moved to the upside on the day, while steel, tobacco and real estate stocks have moved notably lower.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Wednesday. Japan’s Nikkei 225 Index tumbled by 2.8 percent, while China’s Shanghai Composite Index slid by 0.8 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.3 percent, the German DAX Index is down by 1.1 percent and the U.K.’s FTSE 100 Index is down by 1.3 percent.

In the bond market, treasuries have moved higher over the course of the session after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 3.404 percent.

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