Stocks Move Back To The Upside

After moving mostly lower over the past few sessions, stocks moved notably higher over the course of the trading day on Thursday. The markets benefited from a positive reaction to the latest developments overseas as well as some upbeat U.S. jobs data.

The major averages gave back some ground in the final hour of trading but remained firmly positive. The Dow rose 72.46 points or 0.5 percent to 13,485.97, the Nasdaq jumped 42.90 points or 1.4 percent at 3,136.60 and the S&P 500 climbed 13.83 points or 1 percent to 1,447.15.

The strength on Wall Street was partly due to optimism about the possibility of further stimulus from China, with reports suggesting that the China Securities Regulatory Commission will take steps to prop up the domestic equity market.

The rumors out of China contributed to a late-day rally by the Shanghai Composite Index, which surged up by 2.6 percent on the day.

Further buying interest was generated by the unveiling of Spain's budget for 2013, which seeks to balance the country's deficit by focusing on spending cuts rather than tax increases.

The controversial budget sparked massive protests earlier in the week but is designed to pre-empt tougher conditions as part of a potential international bailout.

On the U.S. economic front, the Labor Department released a report showing a much bigger than expected drop in weekly jobless claims.

The report showed that jobless claims fell to 359,000 in the week ended September 22nd from the previous week's revised figure of 385,000. Economists had expected jobless claims to drop to 376,000 from the 382,000 originally reported for the previous week.

With the bigger than expected drop, jobless claims fell to their lowest level since coming in at 357,000 in the week ended July 21st.

Meanwhile, the Commerce Department released a pair of disappointing reports on durable goods orders and second quarter GDP.

While one report showed that durable goods orders plummeted by 13.2 percent in August amid a sharp drop in orders for transportation equipment, a separate report showed that GDP grew by less than previously estimated in the second quarter.

Traders mostly focused on the upbeat jobs data, however, as the reports from the Commerce Department were seen as largely backward-looking in light of the Federal Reserve's recent decision to enact a third round of quantitative easing.

Sector News

Gold stocks turned in some of the market's best performances on the day, driving the NYSE Arca Gold Bugs Index up by 2.7 percent. The strength in the gold sector came amid a notable increase by the price of the precious metal, with gold for December jumping $26.90 to $1,780.50 an ounce.

Significant strength also emerged among semiconductor stocks, as reflected by the 2.3 percent gain posted by the Philadelphia Semiconductor Index. The gain by the index came after it ended the previous session at a two-month closing low.

Computer hardware stocks also regained some ground following recent weakness, with the NYSE Arca Computer Hardware Index advancing by 2.2 percent after hitting its worst closing level in over a month on Wednesday.

Natural gas, housing, and networking stocks also posted notable gains on the day, moving higher along with most of the major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday despite the overnight weakness on Wall Street. Japan's Nikkei 225 Index advanced by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 1.1 percent.

The major European markets also moved to the upside on the day following recent weakness. While the French CAC 40 Index rose by 0.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index both edged up by 0.2 percent.

In the bond market, treasuries moved modestly lower after trending higher for much of the past two weeks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 2.2 basis points to 1.64 percent.

Looking Ahead

Another batch of U.S. economic data is scheduled to be released on Friday, with traders likely to keep an eye on reports on personal income and spending, consumer sentiment, and Chicago-area business activity.

Trading on Friday could also be impacted by reaction to quarterly results from Nike (NKE), as the athletic apparel giant is releasing its fiscal first quarter results after the close of today's trading. (RTTNews)

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