Stocks gain, wariness remains
The stock market Wednesday posted its first advance in four sessions, but investors still showed signs of skittishness.
Share prices initially dropped after the Commerce Department said orders for durable goods plunged 2.8% in May after three months of increases. But the market proceeded to shrug off the report and claw its way back up, boosted by some takeover deals and strong earnings reports, particularly from ConAgra Foods and software firm Oracle.
Given the market's turbulence over the last few weeks because of soaring bond yields, investors will be looking for any clues in the statement due from Federal Reserve policymakers today about their views on growth and inflation.
The Fed -- which is expected to keep its benchmark interest rate steady at 5.25% at today's conclusion of its regular two-day meeting -- has said that it expects the economy to recover from a weak first quarter despite difficulties in the housing market, and that inflation remains a paramount concern.
"We'd like to hear a Fed that's much closer to the center, because they're still pretty hawkish. They sound closer to tightening than to easing," said Arthur Hogan, chief market analyst at Jefferies & Co.
Rate hikes tend to slow down business and can damp corporate profits.
The Dow Jones industrial average rose 90.07 points, or 0.7%, to 13,427.73, after dropping 77 points earlier in the day. The blue-chip index had lost a total of 208 points in the previous three sessions.
The Standard & Poor's 500 index gained 13.45 points, or 0.9%, to 1,506.34, and the Nasdaq composite index jumped 31.19 points, or 1.2%, to 2,605.35.
The Russell 2,000 index of smaller-company stocks rose 12.33 points, or 1.5%, to 838.46.
Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange.
Treasury yields finished slightly lower after the weak durable goods data. But the yield on the 10-year Treasury was 5.08%, unchanged from late Tuesday.
All eyes in the market today will be on the Fed's language.
"If they change the statement, people will pick up on that, no doubt," said Janna Sampson, director of portfolio management at Oakbrook Investments. "No matter what the change is, people will think it means something."
Such reactions aren't the only thing contributing to the market's recent choppiness, Sampson said, noting that many asset managers are simply rebalancing their portfolios before Friday, the last trading day of the second quarter, and the Fourth of July holiday.
