Stocks moved mostly higher over the course of the trading day on Thursday after turning in lackluster performance in the previous session. While buying interest was somewhat subdued, the Dow still managed to reach a new record closing high.
After ending Wednesday’s trading mixed, the major averages all posted modest gains on the day. The Dow edged up 33.25 points or 0.2 percent to 14,329.49, the Nasdaq rose 9.72 points or 0.3 percent to 3,232.09 and the S&P 500 crept up 2.80 points or 0.2 percent to 1,544.26.
The modest strength on Wall Street came following the release of a report from the Labor Department showing an unexpected drop in weekly jobless claims.
The report said initial jobless claims fell to 340,000 in the week ended March 2nd, a decrease of 7,000 from the previous week’s revised figure of 347,000.
The drop came as a surprise to economists, who had expected claims to rise to 355,000 from the 344,000 originally reported for the previous month.
Along with yesterday’s better than expected report on private sector employment, the latest data added to optimism about tomorrow’s monthly jobs report from the Labor Department.
Nonetheless, traders seemed somewhat reluctant to make any significant moves ahead of the release of the closely watched jobs report.
A separate report from the Commerce Department showing that the U.S. trade deficit widened by more than expected in the month of January also helped to keep buying interest in check.
The Commerce Department said the trade deficit widened to $44.4 billion in January from a revised $38.1 billion in December, while economists had expected the deficit to widen to $43.0 billion.
The wider than expected trade deficit came as the value of imports rose amid a jump in oil imports, while the value of exports fell.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the wider than expected trade deficit suggests that net external trade will make either a neutral or slightly negative contribution to first quarter GDP growth.
Traders also kept an eye on developments in Europe, where the European Central Bank announced its decision to leave its main refinancing rate unchanged at a record low of 0.75 percent.
In a press conference, ECB President Mario Draghi said the central bank continues to see downside risks surrounding the economic outlook for the euro area.
Sector News
Networking stocks showed a strong move to the upside on the day, resulting in a 2.5 percent gain by the NYSE Arca Networking Index. With the gain, the index climbed further off the two-month closing low that it set on Monday.
Ciena (CIEN) helped to lead the networking sector higher, with the network equipment maker surging up by 17.3 percent after reporting better than expected first quarter results.
Significant strength was also visible among natural gas stocks, which moved higher along with the price of natural gas. The NYSE Arca Natural Gas Index jumped by 2.2 percent to its best closing level in well over four years.
Banking stocks also saw considerable strength on the day, as reflected by the 1.2 percent gain posted by the KBW Bank Index. Airline and brokerage stocks also posted notable gains.
Meanwhile, gold stocks came under pressure over the course of the trading session, dragging the NYSE Arca Gold Bugs Index down by 1.3 percent. Railroad stocks also saw significant weakness.
Other markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 2225 Index ended the day up by 0.3 percent, while China’s Shanghai Composite Index fell by 1 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index advanced by 0.5 percent, the German DAX Index and the U.K.’s FTSE 100 Index rose by 0.3 percent and 0.2 percent, respectively.
In the bond market, treasuries extended a recent downward move on the heels of the upbeat jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.3 basis points to 1.991 percent.
Looking Ahead
The Labor Department’s monthly jobs report is likely to be in focus on Friday, with economists expecting an increase of about 171,000 jobs in February compared to the addition of 157,000 jobs in January. The unemployment rate is also expected to edge down to 7.8 percent from 7.9 percent.
by RTT Staff Writer
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