Stocks Reach New Record Highs Following Slew Of Data - U.S. Commentary

(RTTNews) - Stocks moved notably higher over the course of the trading session on Wednesday, extending the upward trend seen in recent sessions. The continued strength on the day once again lifted the major averages to new record closing highs.

The major averages closed firmly in positive territory, just off their best levels of the day. The Dow climbed 107.45 points or 0.5 percent to 20,611.86, the Nasdaq advanced 36.87 points or 0.6 percent to 5,819.44 and the S&P 500 rose 11.67 points or 0.5 percent to 2,349.25.

The strength on Wall Street came following the release of a slew of U.S. economic data, including a Commerce Department report showing stronger than expected retail sales growth in the month of January.

The Commerce Department said retail sales increased by 0.4 percent in January following an upwardly revised 1.0 percent jump in December.

Economists had been expecting sales to inch up by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.

Excluding a drop in auto sales, retail sales climbed by 0.8 percent in January after rising by 0.4 percent in December. Ex-auto sales were expected to increase by 0.5 percent.

A separate report from the Labor Department showed that consumer prices increased by much more than expected in the month of January.

The Labor Department said its consumer price index climbed by 0.6 percent in January after rising by 0.3 percent in December. Economists had expected prices to rise by another 0.3 percent.

Core consumer prices, which exclude food and energy prices, rose by 0.3 percent in January after edging up by 0.2 percent in the previous month. Core prices had been expected to show another 0.2 percent uptick.

Meanwhile, the Federal Reserve released a report showing an unexpected drop in industrial production in the month of January, with the decrease reflecting a sharp pullback in utilities output.

The Fed said industrial production dipped by 0.3 percent in January after climbing by a revised 0.6 percent in December. Economists had expected production to come in unchanged.

A report from the National Association of Home Builders also unexpectedly showed a continued decrease in U.S. homebuilder confidence in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 65 in February from 67 in January. The decrease surprised economists, who had expected the index to inch up to 68.

Traders also kept an eye on Fed Chair Janet Yellen's second day of testimony on Capitol Hill, although her prepared remarks before House Financial Services Committee were unchanged from yesterday.

Sector News

Airline stocks showed a strong move back to the upside on the day, driving the NYSE Arca Airline Index up by 1.5 percent. The index more than offset the 1.2 percent drop seen on Tuesday.

The strength in the airline sector came amid news Warren Buffett's Berkshire Hathaway (BRKa) has increased its stakes in the four biggest U.S. carriers.

Considerable strength also emerged among financial stocks, with the Dow Jones Banks Index and the NYSE Arca Broker/Dealer Index both climbing by 1.1 percent.

Telecom, biotechnology, and trucking stocks also saw notable strength, while oil service stocks bucked the uptrend amid a modest decrease by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index surged up by 1.2 percent.

The major European markets also moved to the upside on the day. While the German DAX Index edged up by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index climbed by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries moved lower following the slew of economic data, extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.2 basis points to 2.502 percent.

Looking Ahead

Another batch of economic data is scheduled to be released on Thursday, including reports on weekly jobless claims, housing starts, and Philadelphia-area manufacturing activity.

On the earnings front, Cisco Systems (CSCO), Kraft Heinz (KHC), Marriott (MAR), and CBS (CBS) are among the companies releasing their quarterly results after the close of today's trading.

Avon Products (AVP), Dean Foods (DF), MGM Resorts (MGM), and Wendy's (WEN) are also due to report their results before the start of trading on Thursday.