After an early move to the downside, stocks have shown a notable turnaround over the course of morning trading on Thursday. The major averages have climbed well off their lows of the session and into positive territory.
The major averages have seen further upside in recent trading, reaching new highs for the session. The Dow is up 113.16 points or 0.4 percent at 31,694.44, the Nasdaq is up 45.79 points or 0.4 percent at 11,837.69 and the S&P 500 is up 15.42 points or 0.4 percent at 3,995.29.
The initial weakness on Wall Street came as some traders cashed in on the rally seen in the previous session amid lingering concerns about interest rates and the global economic outlook.
Selling pressure waned shortly after the start of trading, however, allowing stocks to extend the substantial rebound seen on Wednesday.
The turnaround by the markets came even as Federal Reserve Chair Jerome Powell signaled in remarks at the Cato Institute’s monetary policy conference that the central bank will remain aggressive.
Powell reiterated the Fed’s commitment to fighting inflation, once again warning about the dangers of allowing elevated prices to become entrenched.
“We need to act now, forthrightly, strongly as we have been doing,” Powell said. “And we have to keep at it until the job is done.”
The Fed chief’s tone was similar to the speech he delivered at last month’s Jackson Hole economic symposium, which helped trigger the recent round of weakness on Wall Street.
The rebound on Wall Street may reflect the belief that another 75 basis point rate hike later this month has already been priced into the markets.
On the U.S. economic front, the Labor Department released a report unexpectedly showing a modest decrease in initial jobless claims in the week ended September 3rd.
The report showed initial jobless claims edged down to 222,000, a decrease of 6,000 from the previous week’s revised level of 228,000.
Economists had expected jobless claims to inch up to 240,000 from the 232,000 originally reported for the previous week.
Biotechnology stocks are seeing significant strength in morning trading, resulting in a 2.4 percent surge by the NYSE Arca Biotechnology Index.
Vaccine maker Moderna (MRNA) is posting a standout gain after Deutsche Bank upgraded its rating on the company’s stock to Buy from Hold.
Considerable strength has also emerged among banking stocks, as reflected by the 2.1 percent jump by the KBW Bank Index.
Healthcare and brokerage stocks are also seeing notable strength on the day, while gold and airline stocks have moved back to the downside after yesterday’s rally.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index spiked by 2.3 percent, while China’s Shanghai Composite Index dipped by 0.3 percent.
The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.1 percent, the U.K.’s FTSE 100 Index is just below the unchanged line and the German DAX Index is down by 0.6 percent.
In the bond market, treasuries have shown a lack of direction over the course of the morning. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.269 percent.
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