U.S. benchmarks moved higher as a rebound in the health-care sector lifted shares. The Dow Jones Industrial Average added 122.1 points, or 0.7%, to trade at 16,912.29. The S&P 500 Index rose 15.91 points, or 0.8%, to trade at 1,995.83 and the Nasdaq Composite gained 42.79 points, or 0.9% to close Wednesday’s trading session at 4,791.15. The S&P health-care sector rebounded 1.5% after a selloff had seen the sector halt the benchmark’s latest run of consecutive gains. The year has proven to be positive for the sector until August when the market as whole moved back due to high volatility caused by China’s surprise move of devaluing the yen. The health-care sector moved lower on Tuesday over concerns that new legislation would address drug pricing issues – a move that could potentially limit revenues to a significant degree. So far, the sector has fallen 12% from its yearly high and has registered a nearly 1% loss for the year. Currently, investors are awaiting third-quarter earnings reports. Forecasts predict that the S&P’s Q3 profits will decline by more than 5% compared to the previous year as the energy sector gets hit the hardest. While energy-related shares in the S&P have added 1.3%, they have fallen 15% for the year.
Stock markets rose in Asia as well. The Japanese Nikkei 225 added 0.8% and Hong Kong’s Hang Seng Index rose 3.1% after the Chinese government reported that foreign exchange reserves fell at a slower-than-expected pace in September. This statistic offers some comfort in a time where investors are increasingly concerned over the Chinese economy’s growth. Furthermore, the fact that the Federal Reserve is seen as moving further and further away from raising interest rates this has helped ease many of the concerns regarding the stock market, increasing the appeal of riskier opportunities in the markets.
European markets extended their winning streak for the third day as carmakers and commodities gained strength. German factory data released on Tuesday has shown a 1.2% contraction month-over-month despite expectations of a modest advance. UK industrial data beat expectations and has shown a 1% over the previous month. The UK’s FTSE 100 added 0.72% on Wednesday and is currently trading at 6,731.56. The French CAC 40 rose 0.74% to trade at 4,694.96. Both benchmarks have been posting gains since Tuesday. The German DAX rose for the fourth day and closed 0.68% higher at 9,970.4.
The Bank of England will offer its interest rate decision later today, followed by FOMC minutes and U.S. employment data. U.S. import/export and Canadian employment data will be released on Friday.