Stocks gained on Wednesday, following a modest Tuesday rally, amid good news on the jobs front.
The Dow Jones Industrial Average gained more than 65 points after rising Tuesdaydespite significant global headwinds, and mixed economic news.
AT&T , Merck and Exxon Mobil led blue-chips higher, while Home Depot slipped.
The S&P 500 and the Nasdaq also gained. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 18.
All key S&P 500 sectors rose, led by telecom, utilities and financials.
At current levels, the market is on track to post the best quarter since 1998. That's in the face of unrest and uncertainty around the globe, from fighting in Libya, to protests in the Middle East, to the repercussions from the disaster in Japan. One reason for the U.S. market's resilience is investors have few other places to invest, Yu-Dee Chang, chief trader at principal at ACE Investment Strategists told CNBC.com.
"There’s a lot of concerns everywhere, but there is no yield anywhere," Chang said. "So everyone is forced back in the market."
Within the market, Chang likes big, dividend-paying stocks, but he's also making a bet on financials, which have largely slumped since announcing dividend increases and stock buybacks after receiving approvals from the Federal Reserve. Analysts had anticipated the payouts to shareholders, and the stocks sold off on the news.
"We like to buy on dips," Chang said. He likes large-cap financials, and the Financial Select SPRD Fund, which was up more than 1 percent on Wednesday.
He also like gold, and gold-related stocks and exchange-traded funds, as he believes precious metals are benefiting from the current instability in the world. But if stability returns, the economy will revive, and so will inflation, also making gold a smart investment. Gold rose above $1,425 an ounce on Wednesday.
Shares of American Airlines gained more than 3 percent after a story in the Fort Worth Star-Telegram that a firm in Florida plans to buy AMR for $3.25 billion. According to the newspaper, AMR is skeptical of the offer.
Quihoo 360 Technologyskyrocketed more than 100 percent on its first day of trading. The Chinese Internet browser and security company priced its initial public offering Tuesday evening at $14.50 a share.
Japanese automakers continue to struggle. Some 13 percent of worldwide auto output has been disrupted and the situation is still far from stable.
Honda has said it will cut production at its U.S. and Canadian plants starting Wednesday. The company has already suspended production at two plants in Japan. Toyota has also told American dealers to curtail orders.
In earnings news, Family Dollar gained after reporting robust profitson strong sales.
On the tech front, Apple fell slightly after Jefferies pared earnings estimates in part because of supply constraints related to the disaster in Japan. Jefferies remains positive about the company, however, and reiterated its buy rating and $450 price target.
Dell skidded after Needham cuts its rating on the tech giant to "hold," saying its cloud products were disappointing.
Salesforce.com gained after the software company said it would buy Radian6 to supplement its social-media monitoring.
In M&A news, Valeant Pharmaceuticals made a $5.7 billion hostile bidfor Cephalon , to be financed with debt.
Chemicals company DuPont rose after it extended its $6 billion takeover bid for Denmark’s Danisco.
Oil prices fell slightlyas fighting in Libya continued, and as traders weighed high U.S. inventories. On Wednesday, the Department of Energy said crude oil inventories rose by 2.95 million barrels. President Obama, meanwhile, announced a goal of cutting U.S. oil imports by a third on Wednesday. U.S. light sweet crude fell to nearly $104 a barrel and London Brent crude fell to nearly $115.
Meanwhile, the dollar traded flat against a basket of currencies.
The private sector added 201,000 jobsfrom February to March, Automatic Data Processing and Macroeconomic Advisers said on Wednesday. The news comes two days before the government releases its closely watched nonfarm payrolls report.
Earlier, Challenger, Gray & Christmas reported that planned layoffs dropped 18 percent in March, down from 50,702 job cuts in February. And the Mortgage Bankers Association said mortgage applications dropped 7.5 percentfor the week ended March 25, led by a 10.1 percent drop in refinancings.
European shares closed at a three-week high Wednesday, with carmakers among the strongest performers and Porsche up as the subscription period for its capital hike started.
Irish banks were braced for the publication of stress tests on Thursday, which could reveal the need for fresh capital, Reuters reported. Irish bank and insurer Irish Life withdrew its shares from the Irish stock market Wednesday after Irish media reports that Ireland's government will take a majority stake in it following the publication of the new stress tests.
Coming Up This Week:
WEDNESDAY: Seven-year Treasury note auction, farm prices, Wal-Mart international investor conference; earnings from Mosaic after-the-bell; Bullard and Hoenig speak.
THURSDAY: Weekly jobless claims, Chicago PMI, factory orders, money supply; Lacker speaks, Tarullo speaks.
FRIDAY: Auto sales, nonfarm payroll report, ISM manufacturing index, construction spending; Plosser speaks.
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