After an initial move to the downside, stocks have moved modestly higher over the course of morning trading on Thursday. The major averages have bounced well off their early lows and into positive territory.
In recent trading, the major averages have pulled back off their highs but are currently holding on to slim gains. The Dow is up 67.99 points or 0.3 percent at 26,337.88, the Nasdaq is up 18.62 points or 0.2 percent at 9,701.53 and the S&P 500 is up 3.09 points or 0.1 percent at 3,125.96.
Notably, the Nasdaq-100, which includes 100 of the largest non-financial companies listed on the Nasdaq, has offset the sell-off seen in late February and March to reach a new record intraday high.
The continued strength on Wall Street comes as traders express unrelenting optimism about an economic recovery despite data showing the pace of decline in first-time claims for unemployment benefits has begun to stall a bit.
A report from the Labor Department showed initial jobless claims tumbled to 1.877 million in the week ended May 30th, a decrease of 249,000 from the previous week’s revised level of 2.126 million.
However, economists had expected jobless claims to slump to 1.800 million from the 2.123 million originally reported for the previous week.
Jobless claims pulled back further off the record high of 6.867 million set in the week ended March 28th, although the number of new claims since the coronavirus lockdowns now exceeds 42.6 million.
The report also showed an unexpected increase in continuing claims, a reading on the number of people receiving ongoing unemployment assistance, which jumped by 649,000 to 21.487 million in the week ended May 23rd.
Despite the weekly increase, economists at Oxford Economics noted continuing claims remain below their peak, suggesting “a small amount of rehiring may be starting to take place.”
Continued buying interest may also have been generated by European Central Bank announcing additional stimulus to deal with the economic fallout from the coronavirus pandemic.
The ECB announced that it will increase its Pandemic Emergency Purchase Programme by 600 billion euros. The bank announced plans to purchase 750 billion euros of government bonds back in March.
Banking stocks are extending the rally seen in the previous session, driving the KBW Bank Index up by 2 percent to its best intraday level in nearly three months.
Notable strength has also emerged among oil service stocks, as reflected by the 1.6 percent gain being posted by the Philadelphia Oil Service Index.
The strength in the oil service sector comes despite a decrease by the price of crude oil, with crude for July delivery falling $0.50 to $36.79 a barrel.
Semiconductor and steel stocks are also seeing some strength on the day, while most of the other major sectors are showing more modest moves.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, although China’s Shanghai Composite Index bucked the uptrend and edged down by 0.1 percent. Japan’s Nikkei 225 Index and Hong Kong’s Hang Seng Index rose by 0.4 percent and 0.2 percent, respectively.
Meanwhile, the major European markets have moved to the downside on the day. While the French CAC 40 Index has dipped by 0.1 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.5 percent.
In the bond market, treasuries are extending the significant decrease seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.6 basis points at 0.817 percent.
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