Stocks fluctuated over the course of the trading day on Thursday but largely maintained a positive bias before ending the day notably higher. The markets benefited from a positive reaction to some upbeat news from overseas.
The major averages ended the day firmly in positive territory, adding to the gains posted in the previous session. The Dow rose 80.71 points or 0.6 percent to 13,471.22, the Nasdaq climbed 15.95 points or 0.5 percent to 3,121.76 and the S&P 500 advanced 11.10 points or 0.8 percent to 1,472.12.
With the gains over the past two days, the major averages have more than offset the weakness seen earlier this week. The S&P 500 ended the day at a new five-year closing high.
The strength on Wall Street was partly due to the release of some upbeat Chinese trade data, with a report from the Chinese General Administration of Customs showing that the nation’s trade surplus swelled to $31.6 billion in December from $19.6 billion in November.
The report said Chinese exports rose 14.1 percent year-over-year, the fastest rate of growth in seven months. Chinese imports also saw 6 percent annual growth.
The upbeat Chinese trade data generated some optimism about the outlook for the global economy, as China represents the world’s second-largest economy.
Traders also reacted positively to news out of Europe, where the European Central Bank announced its decision to leave interest rates unchanged at a record low.
ECB President Mario Draghi said economic weakness in the euro area is expected to extend into the new year but said economic activity should gradually recover later in 2013.
Meanwhile, traders largely shrugged off a report from the Labor Department showing an increase in initial jobless claims in the week ended January 5th.
The Labor Department said initial jobless claims rose to 371,000 from the previous week’s revised figure of 367,000. Economists had expected jobless claims to drop to 362,000 from the 372,000 originally reported for the previous week.
Sector News
Gold stocks moved sharply higher on the day, regaining some ground following recent weakness. The NYSE Arca Gold Bugs Index surged up by 2.6 percent, bouncing off yesterday’s five-month closing low.
The rebound by gold stocks came amid a notable increase by the price of the precious metal, with gold for February delivery jumping $22.50 to $1,678 an ounce.
Significant strength also emerged among health insurance stocks, as reflected by the 1.6 percent gain posted by the Morgan Stanley Healthcare Payor Index. Humana (HUM) and Molina Healthcare (MOH) turned in two of the sector’s best performances.
Banking, semiconductor, and oil stocks also saw considerable strength on the day, with oil stocks moving higher as the price of crude reached its highest closing level in almost four months.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, adding to yesterday’s gains. Japan’s Nikkei 225 Index rose by 0.7 percent, while Hong Kong’s Hang Seng Index advanced by 0.6 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index fell by 0.2 percent and 0.4 percent, respectively.
In the bond market, treasuries moved back to the downside after regaining some ground over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.2 basis points to 1.894 percent.
Looking Ahead
Trading on Friday may be impacted by reaction to quarterly results from financial services giant Wells Fargo (WFC), which is due to release its fourth quarter results before the start of trading.
U.S. trade data may also attract some attention, with traders likely to keep an eye on reports on the U.S. trade deficit and import and export prices.
by RTT Staff Writer
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