The bulls were in charge on Wall Street again on Wednesday as the smooth, professional buying seen on Tuesday made another appearance. It was a relatively low drama session that allowed prices to rise undistributed.
In the end, the Dow Jones Industrial Average gained a modest 0.2%, the S&P 500 went up 0.4%, the Nasdaq Composite jumped 0.3% and the Russell 2000 ended the day 1.1% higher. Elsewhere, Treasury bonds were mixed, the dollar was slightly weaker, oil moved higher and crude oil gained 1.3% to close at $34.83 a barrel.
The rise in oil boosted energy stocks to a gain of 2.5%, leading the major sector groups. Exxon Mobil Corporation (NYSE:XOM) gained 1.8%, while Chevron Corporation (NYSE:CVX) gained 1.2%.
The gain for energy came as a bit of surprise in the wake of data showing a large crude inventory build. Specifically, stockpiles swelled by 9.9 million barrels according to API data — the largest build since late January. Numbers from the Department of Energy showed a 10.4-million-barrel gain — the largest since last April. Hope is high for a possible OPEC-Russia supply freeze deal later in the month.
A few apparel stocks were hot as well. Abercrombie & Fitch Co. (NYSE:ANF) gained 4.4% thanks to a fourth-quarter EPS beat driven by a 1% jump in comp-store sales and a lower promotional tempo. Ross Stores, Inc. (NASDAQ:ROST) gained 2.7% on Q4 EPS about 3% ahead of the consensus estimate as revenues and comp-store sales beat expectations.
On the downside, material stocks took a breather dropping 0.4% as a group. Monsanto Company (NYSE:MON) fell 7.8% after reducing fiscal year guidance by around 11% on headwinds from currency moves, pricing and compressed grower margins.
There were pockets of strength, however, with gold miners on the move. Barrick Gold Corporation (USA) (NYSE:ABX) gained 2.3% to bring its total gain to 81% since it was recommended to Edge subscribers on Nov. 19. Clients also enjoyed a 7.8% rise in their SPDR S&P Metals and Mining (ETF) (NYSEARCA:XME) position that looks set to push over its 200-day moving average for the first time since September 2014.
On the economic front, ADP private payrolls increased by 244k, in February, ahead of the consensus estimate for a 190k gain and lifting spirits heading into Friday’s big non-farm payrolls report. Service-related employment drove the gains. The Federal Reserve’s Beige Book of regional economic conditions didn’t contain any surprises, with some notes of cautious consumers, strong auto sales, and flat manufacturing activity.
Technically, a lot is going right for stocks right now. Crude oil looks ready for an upside breakout. Mega-cap tech stocks like Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) look ready for upside breakouts. High-yield junk bonds have been strong. And small-cap stocks have been strong.
The percentage of S&P 500 stocks in uptrends has returned to the 65% level last seen in early December when the Dow was trading nearly a 1,000 points higher. Fear is also being squeezed out of the market, with the CBOE Volatility Index (INDEXCBOE:VIX) dropping to levels last seen in late December.
That’s pushed the value of the March $26 iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX) puts recommended to Edge Pro subscribers to a gain of more than 83% since recommended on Feb. 18.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
