Following the weakness seen in the previous session, stocks showed a strong move back to the upside during trading on Wednesday. With the rebound, the tech-heavy Nasdaq climbed well off its lowest closing level in a month.
The major averages finished the day firmly in positive territory. The Dow climbed 143.95 points or 0.7 percent to 21,454.61, the Nasdaq jumped 87.79 points or 1.4 percent to 6,234.41 and the S&P 500 advanced 21.31 points or 0.9 percent to 2,440.69.
The rebound on Wall Street was partly due to bargain hunting, as traders picked up stocks at relatively reduced levels following yesterday’s weakness.
Traders were also reacting to reports European Central Bank officials think the markets misjudged a speech by ECB President Mario Draghi.
Eurosystem officials told Bloomberg that Draghi’s speech was intended to strike a balance between recognizing the currency bloc’s economic strength and warning that monetary support is still needed.
The euro rallied on Tuesday, as Draghi’s remarks were initially seen as signaling that the ECB could trim its stimulus this year.
Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing pending home sales in the U.S. unexpectedly decreased for the third consecutive month in May.
NAR said its pending home sales index fell by 0.8 percent to 108.5 in May from a downwardly revised 109.4 in April. Economists had expected the index to climb by 0.8 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Steel stocks moved sharply higher over the course of the session, driving the NYSE Arca Steel Index up by 3.8 percent. With the jump, the index reached its best closing level in almost two months.
Schnitzer Steel (SCHN), Olympic Steel (ZEUS) and Ryerson (RYI) turned in some of the sector’s best performances on the day.
Considerable strength also emerged among biotechnology stocks, as…