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Benchmarks finished in the green on Wednesday following encouraging economic data and rally in oil prices. ISM Services Index reached its highest level in eleven months, which raised Fed rate hike expectations. This in turn had a positive impact on financial stocks. Also, higher-than-expected decline in crude inventories data led energy sector to register healthy gains.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) increased 0.6%, or 112.58 points, to close at 18,281.03. The S&P 500 rose 0.4% to close at 2,159.73. The tech-laden Nasdaq Composite Index closed at 5,316.02, gaining 0.5%. The fear-gauge CBOE Volatility Index (VIX) decreased 4.7% to settle at 12.99. A total of around 7 billion shares were traded on Wednesday, lower than the last 20-session average of 7.2 billion shares. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 38% declined.

What Boosted The Benchmarks?

The Institute for Supply Management reported that ISM Services Index increased from 51.4% in August to 57.1% last month. The increase was more than the consensus estimate of a rise to 52.8%. It reached at its best settlement in eleven months.

Strong gains in services activity strengthened Fed rate hike prospects, which had a positive impact on bank and financial stocks. The SPDR S&P Bank (KBE) advanced 1.8%, registering its best increase since August 5. Also, financials Select Sector SPDR (XLF) went up 1.6% and was the biggest gainer among the S&P 500 sectors. Dow components JPMorgan Chase & Co (JPM - Free Report) and Goldman Sachs Group, Inc. ( (GS - Free Report) increased 1.6% and 2.6%, respectively.

Further, the U.S. Energy Information Administration (EIA) reported that the U.S. commercial crude oil inventories fell 3 million barrels to 499.7 million for the week ended September 30, in contrast to analysts’ projections of an increase of 2.6 million barrels. Crude inventories posted its fifth straight weekly drop.

WTI crude rose 2.3% to $49.83 per barrel. Brent crude also advanced 1.9% to $51.86 a barrel. Increase in oil prices led the Energy Select Sector SPDR (XLE) to gain 1.5%. Dow components such as Chevron Corporation (CVX - Free Report) and Exxon Mobil Corporation ( (XOM - Free Report) surged 1% and 0.9%, respectively. Both the two companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

In other economic news, U.S. private employers added 154,000 jobs in September, lower than analysts’ expectations of around 173,000 jobs, according to the Automatic Data Processing, Inc. (ADP - Free Report) . This also fell short of August’s revised number of 175,000. Additionally, factory orders rose 0.2% in August after advancing 1.4% in July.

Stocks That Made Headlines Today

Yum! Brands Q3 Earnings Meet Estimates; Stock Down

Shares of Yum! Brands (YUM - Free Report)  declined as its third-quarter earnings remained in line with the Zacks Consensus Estimate, but revenues missed the Zacks Consensus Estimate. (Read More)

Wal-Mart Boosts Stake in JD.com, Expands Further in China

Wal-Mart Stores Inc. (WMT - Free Report) has reportedly increased its stake in Chinese eCommerce website, JD.com Inc. (Read More)

Weyerhaeuser to Divest North Pacific to One Rock

Weyerhaeuser Company (WY - Free Report) announced that it has agreed to sell its printing papers company, North Pacific Paper Company to One Rock Capital Partners, LLC. ( Read More)

Chesapeake's Capital Structure Improves, Here's Why

Chesapeake Energy Corporation (CHK - Free Report) announced that its capital structure has improved to quite an extent owing to recent transactions. (Read More)

MetLife Files for US Retail Unit Spinoff, Moody's Reacts

MetLife, Inc. (MET - Free Report) has filed with the SEC to spin off its U.S. life insurance unit into a new holding company named Brighthouse Financial Inc. ( Read More)

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