Nasdaq Reaches New Record High Amid Rally On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Thursday, adding to the gains posted in the two previous sessions. With the upward move on the day, the tech-heavy Nasdaq set new record intraday and closing highs.

The major averages remained firmly positive going into the close, holding on to strong gains. The Nasdaq soared 68.07 points or 1.3 percent to 5,132.95, while the Dow jumped 180.10 points or 1 percent to 18,115.84 and the S&P 500 surged up 20.80 points or 1 percent to 2,121.24.

The rally on Wall Street came as traders continued to react positive to the Federal Reserve's monetary policy announcement on Wednesday.

While the Fed did not provide any specific guidance regarding its first interest rate hike, the central bank's forecasts reinforced the view that the eventual increase in rates will be gradual.

Tame consumer price inflation data also generated some optimism about the outlook for rates in light of the Fed's insistence that it will be data dependent.

The Labor Department released a report before the start of trading showing that consumer prices rose by slightly less than expected in the month of May.

The report said the consumer price index climbed by 0.4 percent in May after inching up by 0.1 percent in April. Economists had expected a slightly bigger 0.5 percent increase.

Excluding food and energy prices, the core consumer price index edged up by 0.1 percent in May after rising by 0.3 percent in the previous month. Core prices had been expected to rise by 0.2 percent.

While the headline index was unchanged compared to a year ago, the annual rate of growth in core consumer prices slowed to 1.7 percent in May from 1.8 percent in April.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The latter underlines why the Fed is in no hurry to raise interest rates."

The Labor Department released a separate report showing a bigger than expected drop in weekly jobless claims, while the Philly Fed said regional manufacturing conditions saw a notable improvement in June.

Sector News

While most of the major sectors moved notably higher on the day, biotechnology stocks posted particularly strong gains. The NYSE Arca Biotechnology Index surged up by 2.8 percent, reaching its best closing level in almost three months.

BioMarin (BMRN) helped to lead the biotech sector higher, jumping by 12.2 percent after reporting positive results from a study of its treatment for dwarfism.

Considerable strength was also visible among airline stocks, as reflected by the 2 percent gain posted by the NYSE Arca Airline Index. China Southern Airlines (ZNH), Allegiant (ALGT), and SkyWest (SKYW) posted standout gains.

Health care, utilities, semiconductor, and railroad stocks also saw significant strength amid broad based buying interest.

Meanwhile, oil service stocks bucked the uptrend, resulting in a 1.9 percent drop by the Philadelphia Oil Service Index. The weakness in the sector came despite an increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index tumbled by 1.1 percent, while Hong Kong's Hang Seng Index edged down by 0.2 percent.

Meanwhile, the major European markets moved higher over the course of the session. While the German DAX Index surged up by 1.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index rose by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries gave back some ground after trending higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.5 basis points to 2.351 percent.

Looking Ahead

Following the slew of economic data released today, the economic calendar for Friday is relatively quiet, potentially leading to choppy trading.