A rally in the last half hour of trading sent U.S. stocks higher on Wednesday, as Japan's move to rein in the yen helped the U.S. dollar regain some strength. The Japanese currency had risen to a new 15-year high against the greenback on Tuesday, prompting the Japanese prime minister to announce measures to control the yen's rise.
The Dow Jones Industrial Average advanced 46 points, or about 0.4%, to close at 10,573. The DJIA closed at its highest level since August 10. The Nasdaq added 12 points, or 0.5%, to close the day at 2,301, and the S&P 500 increased 4 points, or 0.4%, to end at 1,125.07. The broader index failed to break the key technical level of 1130. On the New York Stock Exchange, less than 1 billion shares exchanged hands as rising stocks beat declining issues by an eight to seven margin. The market's measure of volatility, the CBOE Vix, rose above 22.
The risk-on sentiment yesterday sent prices on the US 10-year down 12/32 as its yield increased to 2.723%. Gold prices eased $3 to retreat a little from their recent record highs, settling at $1267. Price of the yellow metal had peaked to $1275 earlier in the week on expectations some central banks would make further purchases.
This morning's stock futures suggest a soft opening even as a Labor Department report said first-time claims for unemployment claims fell to their lowest level in two months. Ahead of the opening bell, Dow Jones industrial average futures are down 29, or 0.3%, to 10,480. The Standard & Poor's 500 index futures are off more than 4 points, or 0.4%, to 1,116.30, while Nasdaq 100 index futures are down 8.50 points, or 0.4%, at 1,931.
Yesterday, among key S&P 500 industry sectors, health care, consumer staples and technology shares advanced. Utilities, energy, and materials shares led on the downside.
Leading the DJIA's advance was Travelers TRV, which climbed 2.9% after the company raised its planned share buyback to about $4.5 billion to $5 billion from $4 billion prior. Leading on the downside, United Technologies UTX fell 0.7%, on reports of a potential Senate cutback in the $8 billion defense bill. A drop in inventory buildup failed to have an impact on energy shares, with Chevron CVX and ExxonMobil XOM falling 0.4% and 0.02%, respectively. Drillers slumped, with Diamond Offshore Drilling and Schlumberger down 2.5% and 1.1% respectively.
Technology shares advanced, with Apple AAPL rising 0.8% after BMO raised its price target price on the firm to $320 from $315. Hewlett-Packard HPQ advanced 0.8% and Microsoft MSFT edged up 0.3%.
Home Depot HD closed off 0.1%, joining other housing shares, after news of an 8.9% fall in weekly mortgage applications for home purchases pointed to ongoing weakness in the sector. Beazer Homes BZH dropped 7.3% after the company lowered its fiscal 2010 guidance. Shares in Hovnanian Enterprises HOV and PulteGroup PHM also dropped more than 2%.
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