WASHINGTON (dpa-AFX) - Stocks moved mostly higher early in the session on Thursday and continue to turn in a strong performance in afternoon trading. The major averages have more than offset the losses posted in the previous session, with the Dow reaching a new record intraday high.
Currently, the major averages are hovering near their best levels of the day. The Dow is up 417.35 points or 1.0 percent at 41,508.77, the Nasdaq is up 184.06 points or 1.1 percent at 17,740.09 and the S&P 500 is up 45.22 points or 0.8 percent at 5,637.40.
The rebound on Wall Street may partly reflect a positive reaction to the latest U.S. economic data, including a Commerce Department report showing the U.S. economy unexpectedly grew by more than previously estimated in the second quarter.
The Commerce Department said the surge by gross domestic product in the second quarter was upwardly revised to 3.0 percent from the previously reported 2.8 percent. Economists had expected the pace of GDP growth to be unrevised.
With the upward revision, the pace of GDP growth in the second quarter showed an even faster acceleration compared to the 1.4 percent jump in the first quarter.
The report also showed modest downward revisions to the pace of consumer price growth during the second quarter.
'Downward revisions to inflation accompanying an upward revision to spending builds the case for a soft landing,' said Jeffrey Roach, Chief Economist for LPL Financial. 'The key for the rest of this year will be the job market.'
He added, 'Leading indicators for employment indicate services employment is starting to cool but the savings from lower mortgage debt servicing will continue to support household balance sheets.'
A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits edged slightly lower in the week ended August 24th.
The report said initial jobless claims slipped to 231,000, a decrease of 2,000 from the previous week's revised level of 233,000.
Economists had expected jobless claims to come in unchanged compared to the 232,000 originally reported for the previous week.
The strength on Wall Street comes despite a slump by shares of Nvidia (NVDA), with the AI darling tumbling by 3.6 percent.
The drop by Nvidia comes even though the company reported fiscal second quarter results that exceeded analyst expectations and forecast fiscal third quarter revenues above estimates.
'It looks like investors might not have taken the average of analyst forecasts to be the benchmark for Nvidia's performance, instead they've taken the highest end of the estimate range to be the hurdle to clear,' said Dan Coatsworth, investment analyst at AJ Bell. 'The top end was $0.71 earnings per share compared to the $0.68 earnings per share which the company achieved.'
'Another disappointment for investors was the pace of earnings growth,' he added. 'Even though Nvidia is still making more money each quarter than the previous one, the growth rate is slowing. That has triggered alarm bells in the market that the AI gravy train might be losing power.'
Sector News
Software stocks continue to turn in some of the market's best performances on the day, driving the Dow Jones U.S. Software Index up by 2.0 percent.
Considerable strength also remains visible among gold stocks, as reflected by the 1.8 percent jump by the NYSE Arca Gold Bugs Index.
The rally by gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery climbing $21.60 to $2,559.40 an ounce.
A notable increase by the price of crude oil has also contributed to significant strength among oil service stocks, resulting in a 1.5 percent gain by the Philadelphia Oil Service Index.
Steel, semiconductor and networking stocks are also seeing notable strength, while telecom and computer hardware stocks have moved to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index closed just below the unchanged line, while China's Shanghai Composite Index fell by 0.5 percent and South Korea's KOSPI declined by 1.0 percent.
Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index advanced by 0.8 percent, the German DAX Index climbed by 0.7 percent and the U.K.'s FTSE 100 Index rose by 0.4 percent.
In the bond market, treasuries are seeing modest weakness after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.6 basis points at 3.867 percent.
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