U.S. Stocks Rebound on Economic Optimism; Sector Gains Lead Market Higher

Strong private sector job growth and improved services activity lifted Wall Street, sparking rallies in airlines, biotech and tech stocks.

The Nasdaq advanced 151.16 points (0.7%) to 23,499.80, the Dow climbed 225.76 points (0.5%) to 47,311.00 and the S&P 500 rose 24.74 points (0.4%) to 6,796.29.

Stocks strengthened for most of the day as traders bought at lower levels after Tuesdays steep drop driven by valuation concerns. Sentiment also improved following positive U.S. economic data, including an ADP report showing private sector employment jumped by 42,000 in October after a revised 29,000 decline in September.

The Institute for Supply Management released a report showing U.S. service sector activity returned to expansion in the month of October. Its services PMI climbed to 52.4 in October after falling to 50 in September, with a reading above 50 indicating growth. Economists had expected the index to inch up to 50.8. With the bigger than expected increase, the services PMI reached its highest level since hitting 53.5 in February.

Airline stocks continued to see substantial strength, with the NYSE Arca Airline Index soaring by 5.8%. Biotechnology stocks was considerably strong, as reflected by the 3.1% surge by the NYSE Arca Biotechnology Index. Computer hardware and semiconductor stocks too saw significant strength on the day, with the NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index jumping by 3.1% and 3%. Gold stocks also turned in a strong performance amid an increase by the price of the precious metal while housing and software stocks moved to the downside.

Asia-Pacific stocks moved mostly lower. Japan's Nikkei 225 Index tumbled by 2.5% while south Korea's Kospi dove by 2.9%. Meanwhile, the major European markets moved to the upside over the course of the session while the U.K.'s FTSE 100 Index climbed by 0.6%, the German DAX Index rose by 0.4% and the French CAC 40 Index inched up by 0.1%.

In the bond market, treasuries came under pressure in reaction to the latest U.S. economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 6.8 bps to a one-month closing high of 4.15%.

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