Stocks Close Mostly Higher After Staging Another Recovery - U.S. Commentary

(RTTNews) - After coming under pressure early in the session, stocks once again showed a significant turnaround over the course of the trading day on Thursday. With the rebound, the Nasdaq and the S&P 500 reached their best closing levels of 2016.

The major averages saw further upside going into the close, ending the day at their highs for the session. The Dow rose 48.89 points or 0.3 percent to 17,838.56, the Nasdaq advanced 19.11 points or 0.4 percent to 4,971.36 and the S&P 500 climbed 5.93 points or 0.3 percent to 2,105.26.

A decrease by the price of crude oil weighed on the markets early in the session after an OPEC meeting failed to result in an agreement on a new output target.

Crude oil for July delivery fell as low as $47.97 a barrel but staged a notable rebound to close up $0.16 at $49.17 a barrel.

The recovery by the markets also came as traders looked ahead to the release of the closely watched monthly jobs report on Friday.

The Labor Department report is expected to show an increase of about 158,000 jobs in May, while the unemployment rate is expected to edge down to 4.9 percent.

The highly anticipated jobs data could have a significant impact on the outlook for whether the Federal Reserve raises interest rates later this month.

Payroll processor ADP released a report this morning showing that private sector employment increased roughly in line with economist estimates in the month of May.

The report said private sector employment rose by 173,000 jobs in May after climbing by an upwardly revised 166,000 jobs in April.

Economists had expected employment to increase by about 175,000 jobs compared to the addition of 156,000 jobs originally reported for the previous month.

Analysts have noted the Labor Department data will reflect the impact of a recent strike by Verizon (VZ) workers, which did not affect the ADP data.

Sector News

Biotechnology stocks showed a strong move the upside over the course of the session, driving the NYSE Arca Biotechnology Index up by 2.6 percent. With the gain, the index reached its best closing level in well over four months.

Intercept Pharmaceuticals (ICPT), Seattle Genetics (SGE), and Agios Pharmaceuticals (AGIO) turned in some of the biotech sector's best performances.

Considerable strength also emerged among electronic storage stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Disk Drive Index. The gain extended a recent uptrend by the index, which reached a nearly three-month closing high.

Steel, networking, and healthcare stocks also moved notably higher as the day progressed, contributing to the turnaround by the broader markets.

On the other hand, oil service stocks remained stuck in the red, resulting in a 1.3 percent drop by the Philadelphia Oil Service Index. The continued weakness in the sector came despite the rebound in oil prices.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index tumbled by 2.3 percent, Hong Kong's Hang Seng Index advanced by 0.5 percent.

The major European markets also finished the session mixed. While the German DAX Index closed just above the unchanged line, the U.K.'s FTSE 100 Index edged down by 0.1 percent and the French CAC 40 Index fell by 0.3 percent.

In the bond market, treasuries moved back to the upside, more than offsetting the slight drop seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.5 basis points to 1.811 percent.

Looking Ahead

The monthly jobs report will be in the spotlight on Friday, likely overshadowing reports on trade, factory orders, and service sector activity.