Stocks have moved modestly higher in morning trading on Wednesday, partly offsetting the pullback seen in the previous session. The major averages have all moved to the upside, although buying interest has remained somewhat subdued.
Currently, the major averages are off their best levels of the day but remain in positive territory. The Dow is up 68.35 points or 0.2 percent at 34,957.14, the Nasdaq is up 51.44 points or 0.4 percent at 14,729.09 and the S&P 500 is up 10.24 points or 0.2 percent at 4,379.45.
The strength on Wall Street partly reflects a positive reaction to Federal Reserve Chair Jerome Powell’s prepared remarks before the House Financial Services Committee.
Powell reiterated the belief that “substantial further progress” towards the Fed’s goals of maximum employment and price stability is “still a ways off,” suggesting the central bank is not likely to begin tightening monetary policy anytime soon.
The Fed chief also once again stressed that the Fed will provide “advance notice” before announcing any changes to its asset purchase program.
Powell acknowledged that inflation has increased notably and will likely remain elevated in coming months but predicted inflation would moderate as the effects of the production bottlenecks unwind.
The comments about inflation comes as the Labor Department released a report showing producer prices jumped by much more than expected in the month of June.
The Labor Department said its producer price index for final demand surged up by 1.0 percent in June after climbing by 0.8 percent in May. Economists had expected producer prices to rise by 0.6 percent.
The report also showed the annual rate of producer price growth accelerated to 7.3 percent in June from 6.6 percent in May, reaching the highest level since 12-month data were first calculated in November of 2010.
On the earnings front, shares of Citigroup (C) have moved sharply higher after the financial giant reported better than expected second quarter earnings.
Delta Air Lines (DAL) has also moved to the upside after the airline reported a narrower than expected second quarter loss on revenues that exceeded analyst estimates.
Meanwhile, shares of Bank of America (BAC) have come under pressure after the financial giant reported second quarter earnings that beat expectations but on weaker than expected revenues.
Later in the day, the Federal Reserve is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.
Airline stocks have shown a substantial rebound after falling sharply in the previous session, with the NYSE Arca Airline Index jumping by 2 percent.
American Airlines (AAL) has helped lead the sector higher, soaring by 7.3 percent after forecasting a “slight” pretax profit in the second quarter.
Semiconductor and steel stocks are also seeing some strength on the day, while most of the other major sectors are showing more modest moves.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index tumbled by 1.1 percent.
Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has inched up by 0.1 percent, the French CAC 40 Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.
In the bond market, treasuries are regaining ground after coming under pressure over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.9 basis points at 1.366 percent.
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