WASHINGTON (dpa-AFX) - Stocks showed a strong move to the upside in early trading on Thursday but gave back ground over the course of the session. While the major averages pulled back well off their best levels of the day, they still ended the session at new record closing highs.
The Dow finished the day firmly in positive territory, while the S&P 500 and the Nasdaq posted more modest gains. The Dow climbed 269.24 points or 0.7 percent to 39,781.37, the S&P 500 rose 16.91 points or 0.3 percent at 5,241.53 and the Nasdaq edged up 32.43 points or 0.2 percent to 16,401.84.
The early strength on Wall Street came as stocks continued to benefit from positive reaction to Wednesday's monetary policy announcement by the Federal Reserve.
While the Fed left interest rates unchanged, as widely expected, the central bank also maintained its forecast for three interest rate cuts this year.
The unrevised rate cut forecast is seen as bullish for stocks, as some investors had been worried recent hotter-than-expected inflation data could lead Fed officials to reconsider lowering rates.
'We view today's FOMC interest rate decision and press conference as bullish for the equity markets and soft landing scenario,' Larry Tentarelli, President and Founder, Blue Chip Daily Trend Report, said on Wednesday.
'A concern that we had going into was the recent higher than forecast CPI readings,' he added. 'The FOMC dot plot (FOMC members projections for future interest rate levels) remained unchanged at 3 cuts expected for 2024, which we view as a major positive.'
In U.S. economic news, the Labor Department released a report unexpectedly showing a slight drop by first-time claims for U.S. unemployment benefits in the week ended March 16th.
The Labor Department said initial jobless claims edged down to 210,000, a decrease of 2,000 from the previous week's revised level of 212,000.
The dip surprised economists, who had expected jobless claims to rise to 215,000 from the 209,000 originally reported for the previous week.
The National Association of Realtors also released on report showing existing home sales unexpectedly continued to soar in the month of February.
NAR said existing home sale index spiked by 9.5 percent to an annual rate of 4.38 million in February after jumping by 3.1 percent to a rate of 4.00 million in January.
The continued surge came as a surprise to economists, who had expected existing home sales to pull back by 1.5 percent to a rate of 3.94 million.
With the unexpected increase, existing home sales reached their highest level since hitting an annual rate of 4.530 million in February 2023.
Sector News
Semiconductor stocks continued to see significant strength on the day, resulting in a 2.3 percent surge by the Philadelphia Semiconductor Index.
Chipmaker Micron (MU) helped lead the sector higher, soaring by 14.1 percent after reporting better than expected fiscal second quarter results and providing upbeat fiscal third quarter guidance.
Considerable strength also remained visible among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index both jumping by 2.2 percent.
Housing stocks also turned in a strong performance following the existing home sales data, driving the Philadelphia Housing Sector Index up by 1.7 percent.
Computer hardware, networking and transportation stocks also showed notable moves to the upside, while weakness emerged among tobacco and telecom stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index soared by 2.0 percent, while Hong Kong's Hang Seng Index shot up by 1.9 percent.
Most European stocks also moved to the upside on the day. While the U.K.'s FTSE 100 Index surged by 1.9 percent, the German DAX Index jumped by 0.9 percent, the French CAC 40 Index edged up by 0.2 percent.
In the bond, treasuries showed a lack of direction over the course of the session after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point at 4.271 percent
Looking Ahead
Following the release of several key reports this morning, the U.S. economic calendar is relatively quiet on Friday, although traders are likely to keep an eye on remarks by Fed Chair Jerome Powell.
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