Stocks Pare Early Losses, Finish Higher As Oil Sells Off

New York, NY (AHN) - All three major indices opened Wednesday's session lower; however the price of crude oil sold off in late morning trading, sparking a rally in the markets.

The markets opened lower sparked by negative sentiment in the financial sector after mortgage giant Freddie Mac reported a quarterly loss of $821 billion or $1.63 a share, far more than analysts expected.

Crude oil was trading relatively flat after the weekly inventories report showed mixed results, with a larger than expected build in oil being offset by a larger than expected decline in gasoline reserves. However, about an hour after the release of inventories data, the commodity began to sell off. Oil traded near $117 a barrel at one point but settled at $118.58, down 59 cents a barrel.

The Dow Jones Industrial average rose a modest 40 points or 0.35 percent. There was no real conviction on the buy side or sell side as 16 components finished the session higher while 14 of them finished lower.

The S&P 500 produced a small gain, up 4 points or 0.33 percent as six of the 10 major economic sectors moved higher Wednesday. Technology was the strongest as the Nasdaq Composite rose 28 points or 1.2 percent. Slightly better than expected quarterly earnings from Cisco Systems helped propel tech higher as the computer networking giant saw shares rise 5.6 percent to $23.93. The telecom sector was the biggest laggard, down 1.4 percent, sparked by news from Sprint that they saw a drop in total subscribers.

The financials were also weak, down 1 percent on the session.

Thursday's session will see weekly initial claims data before the open as well as pending homes sales data shortly after trading begins.