Stocks moved sharply higher during trading on Wednesday, adding to the strong gains posted in the previous session. The major averages all moved to the upside on the day, with the tech-heavy Nasdaq showing a particularly strong advance.
The major averages pulled back off their best levels in late-day trading but still posted strong gains. The Dow jumped 367.63 points or 1.3 percent to 27,847.66, the Nasdaq spiked 430.21 points or 3.9 percent to 11,590.78 and the S&P 500 surged up 74.42 points or 2.2 percent to 3,443.44.
The rally on Wall Street came as traders reacted to the results of the U.S. elections on Tuesday, which have yet to reach a definitive conclusion.
Democratic candidate Joe Biden is currently in the lead in the race for the presidency, with the latest projections giving the former vice president 248 electoral college votes.
Biden is also leading in Nevada and Michigan, which would give him the 270 electoral college votes needed to unseat President Donald Trump.
However, Trump has called for a recount in Wisconsin and has filed to halt counting of ballots in Michigan, suggesting the outcome of the race could be still be up for grabs.
Democrats currently seem unlikely to take control of the Senate, potentially leading a divided government if Biden is in fact the next president.
Meanwhile, traders largely shrugged off a report from payroll processor ADP showed private sector employment increased by much less than expected in the month of October.
ADP said private sector employment rose by 365,000 jobs in October after spiking by an upwardly revised 753,000 jobs in September.
Economists had expected private sector employment to surge by 650,000 jobs compared to the jump of 749,000 jobs originally reported for the previous month.
"The labor market continues to add jobs, yet at a slower pace," said Ahu Yildirmaz, vice president and cohead of the ADP Research Institute. "Although the pace is slower, we've seen employment gains across all industries and sizes."
A separate report released by the Commerce Department showed the U.S. trade deficit narrowed in the month of September.
The Commerce Department said the trade deficit narrowed to $63.9 billion in September from a revised $67.0 billion in August.
Economists had expected the deficit to narrow to $63.8 billion from the $67.1 billion originally reported for the previous month.
The narrower deficit came as the value of exports jumped by 2.6 percent to $176.4 billion, while the value of imports rose by 0.5 percent to $240.2 billion.
Growth in U.S. service sector activity slowed by more than expected in the month of October, according to a report released by the Institute for Supply Management.
The ISM said its services PMI dipped to 56.6 in October from 57.8 in September, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to edge down to 57.5.
Sector News
Biotechnology stocks moved sharply higher on the day, resulting in a 5.9 percent spike by the NYSE Arca Biotechnology Index.
Substantial strength was also visible among pharmaceutical and healthcare stocks, with the NYSE Arca Pharmaceutical Index and the Dow Jones U.S. Health Care Index jumping by 4.7 percent and 4.4 percent, respectively.
Software stocks also turned in a strong performance during the session, driving the Dow Jones U.S. Software Index up by 4.9 percent.
Semiconductor, housing and retail stocks also saw considerable strength, while banking, steel and gold stocks showed notable moves to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.7 percent, while Hong Kong's Hang Seng Index dipped by 0.2 percent.
Meanwhile, the major European markets all showed strong moves to the upside on the day. While the French CAC 40 Index surged up by 2.4 percent, the German DAX Index soared by 2 percent and the U.K.'s FTSE 100 Index shot up by 1.7 percent.
In the bond market, treasuries moved sharply higher after coming under pressure in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 11.4 basis points at 0.768 percent.
Looking Ahead
The results of the elections are likely to remain in focus on Thursday, overshadowing reports on jobless claims and labor productivity as well as the Federal Reserve's latest monetary policy decision.
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