NEW YORK (TheStreet) -- Heading into the final hour of trading U.S. stocks were at session highs after a report from the Conference Board showed consumer confidence hit a seven-year high, bolstering investors’ outlook for upcoming the holiday season.
The consumer confidence data outweighed a disappointing durable goods report, which reflected cautious business spending in the U.S. and abroad.
Investors awaited an update Wednesday from the Federal Reserve on its outlook for the U.S. economy and confirmation that the central bank will end its monthly bond buying this month.
The S&P 500 was rising 0.73%, while the Nasdaq and Dow Jones Industrial Average were trading higher by 1.35% and 0.67%, respectively.
The Conference Board's consumer confidence index unexpectedly rose to 94.5 in October from a reading of 89.0 in September, exceeding economists' forecasts of a slight monthly drop.
That reading was the highest in seven years and reflected increasing confidence in the U.S. economy, in addition to the pocketbook impact of falling gas prices, which have plunged below $3 a gallon in some regions.
Oil has fluctuated just above multi-year lows on Wednesday, with Nymex West Texas Intermediate Crude trading up 0.38% in midday trading at $81.38 a barrel, while ICE Brent was trading slightly higher at $86.04.
”We think low energy costs could be a positive for consumers as we enter the holiday season,” Terry Sandven, chief equity strategist at US Bank Wealth Management, said in a telephone interview.
Durable goods orders in the U.S. unexpectedly fell 1.3% in September, sharply missing median economist forecasts of a 0.5% rise. Sandven said the weak report reflected a cautious tone among businesses. Nonetheless, he believes U.S. stock markets will trade higher into year-end as fourth-quarter earnings forecasts are firmed up.
Energy was the top performing sector in the S&p 500, gaining 1.79% in late afternoon trading. Newfield Exploration (NFX) , Transocean (RIG) - Get Report and Cimarex Energy (XEC) - Get Report were leading the sector higher, each gaining over 4%.
Cummins (CMI) - Get Report , Whirlpool (WHR) - Get Report and Autonation (AN) - Get Report were the leading gainers on the S&P 500 on Wednesday, each rising over 6% after reporting better-than-forecast earnings. Retailers Kohls (KSS) - Get Report and Coach (COH) were falling the most, losing over 6% each.
In housing markets, the S&P Case-Shiller Home Price Index showed a 0.2% month-over-month increase in housing prices nationwide in August, slightly exceeding estimates of a 0.18% rise. Detroit led monthly home price gains, posting a 0.8% rise, while San Francisco led losers with a 0.4% decline.
U.S. stocks also were bolstered by strong industrial figures in China. Data from the Chinese statistics bureau showed that industrial profits in the country rose by 563.4 billion yuan ($92.2 billion) in September, reversing a 0.6% drop in August.
Guidance from the Federal Reserve has indicated an end to stimulus efforts, as do median forecasts of economists polled by Bloomberg.
“I don’t see how economic data has changed enough for Janet Yellen to not just taper at this point,” Brad Wilson, vice president of fixed income portfolio management at Boston Private Bank, said in a telephone interview on Monday evening.
Wilson expects that interest rates will remain low for an extended period, even afterthe Fed ends its bond buying. “It is tough to drive interest rates higher when there is no wage growth,” he said.
In corporate earnings, Twitter (TWTR) - Get Report reported adjusted third-quarter earnings of 1 cent a share, matching forecasts, while revenue topped analysts' expectations. Shares in the social network tumbled on investors’ disappointment with the company’s user growth and its earnings outlook for coming quarters. Shares tumbled more than 8% in afternoon.
In midday trading, MSG was also trading at a higher market capitalization than former parent Cablevision (CVC) , which spun off the business in 2009.
DuPont (DD) - Get Report and Pfizer (PFE) - Get Report reported better-than-forecast third-quarter earnings, while telecom T-Mobile (TMUS) - Get Report added 1.4 million post-paid subscribers in the third quarter and maintained coming quarters' guidance.
Social media giant Facebook (FB) - Get Report is expected by Wall Street on Tuesday to report a profit of 40 cents a share in the third quarter on revenue of $3.12 billion. Facebook earned 17 cents a share in the same quarter a year earlier.
-- Written by Antoine Gara in New York