US stocks end higher for first time in three sessions

Energy and financial sectors lead the rally

U.S. stocks closed higher on Wednesday, 05 October 2016 by trading off session highs as they rebounded from losses of the past two sessions, fueled by rising oil prices. A resurgent services sector also helped to lift demand for equities and other assets perceived as risky. Wednesday marked the first finish in positive territory for the main U.S. stock-index benchmarks this week.

The Dow Jones Industrial Average finished up 112.58 points, or 0.6%, at 18,281.03, topped by more than 2% gains in both Caterpillar and Goldman Sachs Group. The Nasdaq Composite Index rose 26.36 points, or 0.5%, to end at 5,316.02. The S&P 500 index added 9.24 points, or 0.4%, to close at 2,159.73.

Seven sectors settled in the green with financials, energy, and materials leading the advance. The financials and energy sectors led the gainers, while telecom, utilities and real estate, weighed on the index.

Today's economic data included weekly MBA Mortgage Index, ADP Employment Report for September, August Trade Balance, Factory Orders for August, and ISM Services for September.

The MBA Mortgage Index indicated that mortgage applications rose 2.9% in the week ending October 1. This followed a 0.7% decline in the prior week.

The Trade balance report for August showed a widening in the deficit to $40.7 billion (consensus -$39.1 billion) from $39.5 billion in July. Factory orders increased 0.2% in August (consensus +0.1%) following a downwardly revised 1.4% increase (from 1.9%) in July. Total manufacturing shipments were unchanged after declining 0.4% in July. The ISM Non-Manufacturing PMI increased to 57.1 in September from 51.4 in August. September marked the highest reading for the index since October 2015.

Amid a flood of U.S. economic reports, Automatic Data Processing Inc. reported that private-sector employers added 154,000 jobs last month, down from 175,000 in August. ADP's jobs reading is considered an important indicator of labor-market health, though it is rarely predictive of the Labor Department's nonfarm-payrolls report, one of the most widely watched pieces of U.S. economic data. The government's September jobs report is due Friday morning.

Treasuries finished near their worst levels as yields rose through the curve. The yield on the 2-yr note increased one basis point (0.83%) while the yield on the benchmark 10-yr note rose two basis points (1.70%).

Today's participation was above the recent average as more than 962 million shares changed hands on the NYSE floor.

U.S.traded oil futures flirted with $50 a barrel for the first time since June, settling up 2.3% at $49.83 a barrel. Gold futures slipped, settling down 0.1% at $1,268.60 an ounce, as did a key dollar index after the ISM data.

Tomorrow's economic data will be limited to September Challenger Job Cuts and weekly initial claims (consensus 258k), which will be released at 7:30 ET and 8:30 ET, respectively.

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