After moving sharply higher early in the session, stocks continue to see considerable strength in mid-day trading on Thursday. With the advance on the day, the major averages are extending the upward move seen over the course of the previous session.
Currently, the major averages are hovering near their best levels of the day. The Dow is up 539.19 points or 1.6 percent at 34,956.18, the Nasdaq is up 247.27 points or 1.7 percent at 14,749.18 and the S&P 500 is up 63.52 points or 1.5 percent at 4,427.07.
The rally on Wall Street comes as lawmakers have reached an agreement to temporarily extend the debt limit, avoiding a potential default.
Senate Majority Leader Chuck Schumer, D-N.Y., announced an agreement to extend the debt ceiling through early December.
The agreement would reportedly increase the debt limit by $480 billion, allowing the Treasury to continuing paying its bills through December 3rd.
While the temporary extension means the U.S. could face another debt crisis in just a few weeks, the news has been greeted positively by traders.
Adding to the positive sentiment, a report from the Labor Department showed a bigger than expected pullback in first-time claims for U.S. unemployment benefits in the week ended October 2nd.
The report said initial jobless claims fell to 326,000, a decrease of 38,000 from the previous week’s revised level of 364,000.
Economists had expected jobless claims to dip to 348,000 from the 362,000 originally reported for the previous week.
The bigger than expected decrease came after jobless claims rose for three straight weeks, reaching their highest level since early August.
The release of the weekly jobless claims report comes a day ahead of the release of the Labor Department’s more closely watched monthly jobs report on Friday.
Economists currently expect employment to increase by 488,000 jobs in September after rising by 235,000 jobs in August. The unemployment rate is expected to dip to 5.1 percent from 5.2 percent.
Networking stocks continue to see significant strength in mid-day trading, resulting in a 2.5 percent jump by the NYSE Arca Networking Index.
Considerable strength also remains visible among steel stocks, with the NYSE Arca Steel Index surging up by 2.3 percent after ending the previous session at a six-month closing low.
Semiconductor stocks have also shown a strong move to the upside on the day, driving the Philadelphia Semiconductor Index up by 2.3 percent.
Oil service stocks have also moved sharply higher amid a rebound by the price of crude oil, while tobacco, biotechnology and housing stocks are also seeing notable strength.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.5 percent, while Hong Kong’s Hang Seng Index spiked by 3.1 percent.
The major European markets also showed strong moves to the upside. While the U.K.’s FTSE 100 Index jumped by 1.2 percent, the French CAC 40 Index and the German DAX Index surged up by 1.7 percent and 1.9 percent, respectively.
In the bond market, treasuries have come under pressure after ending the previous session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.9 basis points at 1.563 percent.
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