Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Wednesday, with stocks likely to extend the strong upward move seen late in the previous session.
Early buying interest may be generated in reaction to a report from payroll processor ADP showing stronger than expected private sector job growth in the month of October.
The upbeat private sector jobs data is likely to generate optimism about the Labor Department?s more closely watched monthly jobs report due to be released on Friday.
A positive reaction to earnings news from some big-name companies is also likely to benefit the markets, with General Motors (GM) and Facebook (FB) moving notably higher in pre-market trading after reporting better than expected quarterly results.
After fluctuating for much of the session, stocks moved significantly higher late in the trading day on Tuesday. The major averages climbed firmly into positive territory after turning lower over the course of the trading session on Monday.
The major averages saw further upside going into the close, ending the day just off their highs of the session. The Dow soared 431.72 points or 1.8 percent to 24,874.64, the Nasdaq jumped 111.36 points or 1.6 percent to 7,161.65 and the S&P 500 surged up 41.38 points or 1.6 percent to 2,682.63.
The sharply higher close on Wall Street came after the pullback seen on Monday dragged the Nasdaq and the S&P 500 down to six-month closing lows and the Dow fell to its lowest closing level in well over three months.
Traders once again looked to pick up stocks at reduced levels after bargain hunting efforts in the previous session were thwarted by renewed concerns about the trade war between the U.S. and China.
President Donald Trump’s prediction the U.S. will reach a “great deal” with China on trade offset some of the concerns, although the president also warned of more tariffs if a deal is not possible.
“I think that we will make a great deal with China and it has to be great, because they’ve drained our country,” Trump told Laura Ingraham of Fox News on Monday.
The comments from Trump came after a report from Bloomberg said the U.S. is preparing to announce tariffs on all remaining Chinese imports if next month’s talks between Trump and Chinese President Xi Jinping fail to ease the trade war.
Trump and Xi are expected to meet on the sidelines of a Group of 20 summit in Buenos Aires, Argentina, beginning November 30th.
Positive sentiment may also have been generated by a report from the Conference Board showing a continued increase in consumer confidence in the month of September.
The Conference Board said its consumer confidence index rose to 137.9 in October from a downwardly revised 135.3 in September.
Economists had expected the consumer confidence index to drop to 136.3 from the 138.4 originally reported for the previous month.
With the increase, the consumer confidence index reached its highest level since hitting 142.5 in September of 2000.
Housing stocks showed a substantial move to the upside on the day, driving the Philadelphia Housing Sector Index up by 5 percent. The index rebounded after ending the previous session at its lowest closing level in well over a year.
Construction materials maker Vulcan Materials (VMC) led the housing sector higher after reporting better than expected third quarter results.
Significant strength was also visible among semiconductor stocks, as reflected by the 4.2 percent jump by the Philadelphia Semiconductor Index. With the gain, the index also rebounded from a more than one-year closing low.
Computer hardware, transportation, oil, and networking stocks also saw considerable strength on the day, reflecting broad based buying interest on Wall Street.
