Stocks closed higher Wednesday in a broad advance that more than wiped away the prior day's losses,while small caps made a new high.
XThe Dow Jones industrial average rose 1.3% and is back to having a small gain for 2018. It also closed above the 50-day moving average, one day after it ended slightly below that price average. But the Dow failed to erase all of Tuesday's loss, a difference with the other big indexes.
For the Nasdaq composite, Wednesday's 0.9% gain gave the index its highest close since March 16. The S&P 500 rose 1.3% as it also wiped away Tuesday's decline. Small caps outperformed, with the Russell 2000 adding 1.5% — a new high.
Preliminary figures showed market volume fell, which took something away from the day's rally. But breadth was the most bullish in many weeks. Advancers led decliners by 17-to-4 on the NYSE and by 13-to-5 on the Nasdaq.
The market didn't react much to the latest Fed Beige Book. The survey of economic regions saw the economy expand moderately in much of April and May, while there was little indication of overheating. Labor shortages in some areas were a concern.
Energy, metals, transportation and financials led the market's rebound. Oil prices rebounded 2.2% to close at $68.21 a barrel. Saudi Arabia and other major oil producers plan to stick to their production targets, reports said. Cheniere Energy Partners (CQH), a dividend play in the energy sector, topped its 29.83 buy point in heavy volume.
REITs Also Lead Market
Real estate investment trusts also led, with a few rising past buy points. Sun Communities (SUN), Hudson Pacific Properties (HPP) and National Storage (NSA) broke but volume was light.
Drug stocks were higher after President Trump said he expects pharmaceutical companies to announce voluntary and "massive" price cuts. The SPDR S&P Pharmaceuticals (XPH) exchange traded fund rose nearly 2%. It was one of the best gainers among sector ETFs.
Autohome (ATHM) broke out past the 107.64 buy point of an ascending base in heavy volume. After Thursday's close, the Chinese auto marketing website company is being added to MSCI indexes. The stock has been a volatile but profitable selection in IBD Leaderboard.
Tesla (TSLA) rose 2.8% after Consumer Reports reversed itself and gave the Model 3 sedan a recommendation, only days after the magazine flunked the electric-powered car. The unusual change came after Consumer Reports retested the model after Tesla improved the braking abilities through an update. The stock is recovering from a big correction.
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