U.S. stocks surged for a third straight session Wednesday, as Wall Street assessed spiking oil prices and the Federal Reserve's minutes amid mixed data. The Dow Jones Industrial Average added 177.16 points, or 1.09 percent, to 16,373.57. The S&P 500 jumped 26.80 points, or 1.41 percent, to 1,922.38. The Nasdaq Composite Index surged 76.64 points, or 1.73 percent, to 4,512.59.
Investors were encouraged by a strong rebound in oil prices. Oil prices rocketed Wednesday as Iran supported output freeze deal proposed by top producers Russia and Saudi Arabia. The West Texas Intermediate for March delivery moved up 1.62 U. S. dollars to settle at 30.66 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery increased 2.32 dollars to close at 34.5 dollars a barrel on the London ICE Futures Exchange. In response, the energy sector surged 2.92 percent as the biggest advancer among the S&P 500's ten sectors. The Fed minutes released Wednesday afternoon were also a factor.
According to the minutes, in discussing the appropriate path for the target range for the federal funds rate over the medium term, policymakers agreed that it would be important to closely monitor global economic and financial developments and to continue to assess their implications for the labor market and inflation. "The actual path of the federal funds rate will depend on the economic outlook as informed by incoming data," the minutes said.
"Participants still have a 2-percent medium-term inflation forecast. They are wary of financial market carnage, but don't think it will affect the real economy. If the market continues to recover between now and Mar.16, the Fed will hike rates," said Chris Low, chief economist at FTN financial.
On the economic front, U.S. privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,099,000, missing market consensus, the Commerce Department reported Wednesday. The seasonally adjusted Producer Price Index (PPI) for final demand advanced 0.1 percent in January, above market estimates, the U.S. Labor Department announced Wednesday.
U.S. industrial production increased 0.9 percent in January after decreasing 0.7 percent in December, said the Fed Wednesday. The latest figure also beat market expectations. The CBOE Volatility Index, often referred to as Wall Street's fear gauge, fell 7.47 percent to end at 22.31 Wednesday.
In other markets, the U.S. dollar traded mixed against other major peers on Wednesday following the release of the Fed minutes and a batch of economic data from the country. In late New York trading, the euro declined to 1.1132 dollars from 1.1142 dollars in the previous session, while the dollar bought 113.83 Japanese yen, lower than 113.88 yen of the previous session.
Gold futures on the COMEX division of the New York Mercantile Exchange rose on Wednesday on a weaker U.S. dollar. The most active gold contract for April delivery added 3.2 dollars, or 0.26 percent, to settle at 1,211.40 dollars per ounce.
Latest comments