US stocks jumped in a broad advance on Wednesday, with the S&P 500 snapping a three-day losing streak and climbing back above a key technical level in a move that pointed to improving near-term momentum. The day's gains were spread across industries, with nine of the ten primary S&P 500 sectors up on the day, though healthcare and biotechnology stocks led the gains. Housing stocks also rose following bullish data on the sector.
The S&P posted its biggest one-day advance in more than a month and closed above its 14-day moving average, which it had ended under for the previous two sessions. The day's advance continues a long-running trend of investors buying on dips. At its session low on Wednesday, the benchmark index neared its 50-day moving average before rebounding. If that level continues to serve as support, it could provide a floor against deeper equity losses. The S&P hasn't had a correction, defined as a 10 percent decline from a peak, since 2012.
"We're having a nice bounce on the housing data, which hasn't been very good in a while, and people are buying the recent dip," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "This is a market that continues to attract capital from other asset classes, because where else can investors go for yield?" New home sales jumped sharply in August, easing concerns over the sector stemming from Monday's weak report on existing home sales. The PHLX Housing index rose 0.6 percent. Equities were also supported after a top Federal Reserve official said at a conference that the Fed should be "exceptionally patient" in removing monetary policy accommodation.
The Dow Jones industrial average rose 155.6 points, or 0.91 percent, to 17,211.47, the S&P 500 gained 15.65 points, or 0.79 percent, to 1,998.42 and the Nasdaq Composite added 46.53 points, or 1.03 percent, to 4,555.22. In company news, Bed Bath & Beyond jumped 7.3 percent to $67.28 as the biggest S&P 500 gainer a day after reporting earnings and revenue that beat expectations.
The Nasdaq biotech index rose 2.8 percent in its biggest one-day advance since July 18. Among specific names, Vertex Pharma climbed 6.7 percent to $111.91 while Alexion Pharma added 6.4 percent to $168.79 and Biogen rose 4.3 percent to $346.41. Biotech stocks had fallen in Monday's and Tuesday's sessions, pressured as investors took profits in the high-flying group, which many traders view as overvalued.
After the market closed, Jabil Circuit shares rose 5.8 percent to $22.06 in extended trading after the company reported its results. About 56 percent of stocks traded on the New York Stock Exchange ended higher while 64 percent of Nasdaq-listed names closed in positive territory. About 5.63 billion shares traded on all US platforms, according to BATS exchange data, compared with the month-to-date average of 6.01 billion.
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