WASHINGTON (dpa-AFX) - Stocks moved sharply higher in early trading on Thursday and have seen further upside over the course of the session. While the tech-heavy Nasdaq is leading the charge, the major averages have all shown strong upward moves on the day.
Currently, the major averages are hovering near their highs of the session. The Nasdaq is up 391.61 points or 2.3 percent at 17,584.21, the S&P 500 is up 83.38 points or 1.5 percent at 5,538.59 and the Dow is up 503.04 points or 1.3 percent at 40,511.43.
The rally on Wall Street comes as the Commerce Department released a report showing much stronger than expected retail sales growth in July, easing concerns about the economic outlook.
The Commerce Department said retail sales jumped by 1.0 percent in July after edging down by a revised 0.2 percent in June.
Economists had expected retail sales to rise by 0.3 percent compared to the unchanged reading originally reported for the previous month.
Excluding a surge in sales by motor vehicle and parts dealers, retail sales still rose by 0.4 percent in July after climbing by 0.8 percent in June. Ex-auto sales were expected to inch up by 0.1 percent.
Shares of Walmart (WMT) are also moving sharply higher trading after the retail giant reported fiscal second quarter results that exceeded analyst estimates and raised its full-year guidance.
Positive sentiment was also generated in reaction to a Labor Department report showing an unexpected decline by first-time claims for U.S. unemployment benefits in the week ended August 10th.
The Labor Department said initial jobless claims fell to 227,000, a decrease of 7,000 from the previous week's revised level of 234,000.
Economists had expected jobless claims to inch up to 235,000 from the 233,000 originally reported for the previous week.
'If the economy continues to be resilient - especially in conjunction with slowing inflation - then the Fed can begin a rate cutting cycle without the economy entering recession and history shows this is an extremely positive environment for the stock market,' said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.
Meanwhile, traders have largely shrugged off a report from the Federal Reserve showing industrial production in the U.S. fell by much more than expected in the month of July.
The report said industrial production decreased by 0.6 percent in July after rising by a downwardly revised 0.3 percent in June.
Economists had expected industrial production to dip by 0.3 percent compared to the 0.6 percent increase originally reported for the previous month.
Sector News
Semiconductor stocks continue to see substantial strength on the day, resulting in a 5.0 percent spike by the Philadelphia Semiconductor Index.
Significant strength also remains visible among airline stocks, with the NYSE Arca Airline Index soaring by 4.2 percent.
Networking stocks also remain sharply higher, as reflected by the 3.7 percent surge by the NYSE Arca Networking Index.
Cisco Systems (CSCO) has led the sector higher after reporting better than expected fiscal fourth quarter results and announcing plans to lay off 7 percent of its workforce.
Computer hardware, retail and oil service stocks are also seeing considerable strength amid broad based buying interest on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index climbed by 0.8 percent, while China's Shanghai Composite Index advanced by 0.9 percent.
The major European markets also moved to the upside on the day. While the German DAX Index surged by 1.7 percent, the French CAC 40 Index jumped by 1.2 percent and the U.K.'s FTSE 100 Index increase by 0.8 percent.
In the bond market, treasuries have pulled back sharply after moving notably higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 11.0 basis points at 3.932 percent.
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