United States stocks advanced, with defensive sectors outperforming broader benchmarks amid rising investor hopes for continued easy-money policies from central banks.
The Dow Jones Industrial Average advanced 87 points, or 0.6%, to 15,706 points. On Tuesday, the Dow erased an early loss of as much as 117 points to close down 21 points, or 0.1%. Earlier in the current session, the Dow was trading as high as 15,732 points. Although it has retreated somewhat, its current trading level would see it eclipse its previous closing record high of 15,680.35 set on October 29.
The S&P 500 climbed four points, or 0.2%, to 1,767 points. It is up 24% year to date and is trading near its all-time high of 1,771.95 points.
The Nasdaq Composite Index slipped 14 points, or 0.4%, to 3,926 points.
Better-than-expected economic data from the US and Europe supported stock-market gains in early trading. But Friday's closely watched October employment report will take top billing for markets, as investors try to determine when the Federal Reserve could start paring its easy-money policies. The partial government shutdown is expected to weigh on Friday's report.
"Everyone is just watching the Fed," said John Fox, director of research with Fenimore Asset Management. But he isn't expecting an imminent pullback, as "the employment number could be modest."
Telecommunications and utilities sectors led gainers in the S&P 500, adding 1.2% and 0.8%, respectively. Those sectors often trade as proxies for the bond market, and sold off sharply over the summer, after the Fed said it would consider paring back on its bond-buying program.
Fed officials have said they will pay close attention to the labour market to determine when the economy is strong enough to weather a paring of stimulus efforts. A recent paper from a central-bank official argued that unemployment could need to fall much lower before rate increases would be effective, which helped support gains in Treasury prices Wednesday. The yield on the 10-year note fell to 2.640% from a three-week high of 2.662% late Tuesday.
In Europe, stocks gained after better-than-expected economic data and as expectations remained that the European Central Bank may also act to bolster the economy, possibly as soon as Thursday's policy decision.
"Investors will be watching the ECB announcement closely in light of last week's euro-zone inflation report, which was worryingly low," said Stephen Macklow-Smith, a European equities portfolio manager at JPMorgan Asset Management. "It's possible the ECB will decide to trim interest rates at the margin."
In the US, an index tracking forward-looking economic indicators rose by more than expected. The Conference Board's Leading Economic Index for September rose 0.7% on the month, while a rise of 0.6% was forecast.
The latest data "just shows that the global economy is doing well," said Chris Gaffney, senior market strategist with EverBank Wealth Management. The gains reflect "general confidence on the global growth story."
The Nasdaq Composite underperformed but tech stocks in the S&P 500 gained, as investors waited for social-media company Twitter's initial public offering, expected Thursday.
Joseph Greco, managing director of trading with brokerage firm Meridian Equity Partners, said money-manager clients focusing on technology were trimming some holdings in the sector, so they could have cash on hand to invest in the stock.
"People are clearing up some capital," he said. "If you [invest in] the media space, your fund has to own some."
The pricing of Twitter's initial public offering is due late in the day Wednesday. The social-media company raised its proposed price range to between $23 and $25 a share this week, up from between $17 and $20 a share, amid strong demand. That increases the potential size of the IPO to $2 billion from $1.6 billion.
In earnings news, Tesla Motors tumbled after the electric-car maker reported third-quarter results. Adjusted earnings and revenue were above analyst estimates but not by as much as many investors had hoped. In addition, Model S deliveries in the quarter were less than some analysts were expecting.
Tesla shares had gained 32% since the second-quarter report, and by more than 400% year to date.
Abercrombie & Fitch slid after the teen-apparel retailer reported revenue that fell more than expected, weighed down by sharp declines in US and international same-store sales. The company also said it plans to close all of the stand-alone Gilly Hicks stores, its intimate-apparel brand, by the fiscal first quarter.
Earlier, the Mortgage Bankers Association said its seasonally adjusted mortgage applications index fell 7% in the latest week amid declines in both refinancings and purchase activity.
December crude-oil futures rose 1.6% to $94.89 a barrel, after settling at a five-month low on Tuesday. Gold futures gained 0.6% to $1,315.80 a troy ounce. The dollar was mixed, edging higher against the yen but easing against the euro.
The Stoxx Europe 600 was up 0.3% on the positive data and ECB hopes. Germany's DAX 30 index advanced 0.3%, France's CAC 40 index climbed 0.7% and the U.K.'s FTSE 100 index edged down 0.1%.
Data firm Markit said its October composite purchasing managers index for the euro area slipped to 51.9 from 52.2 in September, but was revised up slightly from an earlier reading. Readings above 50 indicate expansion.
In addition, the services PMI for the euro zone fell to 51.6 in October from September's 52.2, but topped expectations of 50.9. And UK industrial production for September rose 0.9% on the month versus expectations of a 0.5% increase.
Asian markets were mixed. Japan's Nikkei Stock Average rose 0.8%, supported by a weaker yen, while China's Shanghai Composite fell 0.8%.