Stocks Close Sharply Higher Amid Increase In Oil Prices - U.S. Commentary

(RTTNews) - Following the sell-off seen in the previous session, stocks moved sharply higher over the course of the trading day on Thursday. With the gains on the day, the major averages bounced well off the three-month closing lows set on Wednesday.

The major averages pulled back off their best levels going into the close but remained firmly positive. The Dow jumped 227.64 points or 1.4 percent to 16,379.05, the Nasdaq soared 88.94 points or 2 percent to 4,615.00 and the S&P 500 surged up 31.56 points or 1.7 percent at 1,921.84.

The strength on Wall Street was partly due to an increase by the price of crude oil, which bounced further off the twelve-year closing low set on Tuesday.

After inching up $0.04 to $30.48 a barrel on Wednesday, crude oil for February delivery climbed $0.72 to $31.20 a barrel.

Traders also reacted positively to quarterly results from JP Morgan (JPM), with the financial giant advancing by 1.5 percent.

JP Morgan reported fourth quarter net earnings that rose 10 percent year-over-year and exceeded analyst estimates. The company's revenues for the quarter also exceeded expectations.

On the U.S. economic front, the Labor Department released a report before the start of trading showing that initial jobless claims unexpectedly increased in the week ended January 9th.

The report said initial jobless claims climbed to 284,000, an increase of 7,000 from the previous week's unrevised level of 277,000. Economists had expected jobless claims to edge down to 275,000.

A separate Labor Department report showed a significant drop in U.S. import prices in the month of December, although the decrease was not quite as steep as economists had anticipated.

Among individual stocks, shares of Infosys (INFY) moved sharply higher after the Indian software services exporter raised its full year revenue growth guidance after reporting third quarter earnings that met analyst estimates.

Filtration systems and packaging materials manufacturer Clarcor (CLC) also posted a strong gain after reporting better than expected fourth quarter earnings.

On the other hand, shares of GoPro (GPRO) saw a steep drop after the action camera maker provided disappointing fourth quarter guidance and announced a 7 percent reduction in its workforce.

Sector News

Benefiting from the increase by the price of crude oil, energy stocks saw substantial strength throughout the trading session.

The NYSE Arca Oil & Gas Index surged up by 4.4 percent, while the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index jumped by 3.4 percent and 2.8 percent, respectively. The indexes rebounded from multi-year lows.

Steel stocks also turned in a particularly strong performance on the day, with the NYSE Arca Steel Index soaring by 3.6 percent after ending the previous session at a record closing low.

Considerable strength was also visible among biotechnology stocks, as reflected by the 3.2 percent gain posted by the NYSE Arca Biotechnology Index. With the gain, the index bounced off its worst closing level in over a year.

Healthcare, telecom, pharmaceutical, and software stocks also saw significant strength, while gold stocks were among the few groups to buck the uptrend amid a decrease by the price of the precious metal.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region came under pressure on Thursday, although Chinese stocks bucked the downtrend. Japan's Nikkei 225 Index plunged by 2.7 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.7 percent, the German DAX Index and the French CAC 40 Index slumped by 1.7 percent and 1.8 percent, respectively.

In the bond market, treasuries drifted lower as the day progressed, giving back some ground following recent strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.2 basis points to 2.098 percent.

Looking Ahead

A slew of U.S. economic data is scheduled to be released on Friday, with traders likely to keep a close eye on reports on retail sales, producer prices, industrial production, and consumer sentiment.

Trading could also be impacted by reaction to earnings news from semiconductor giant Intel (INTC), which is releasing its fourth quarter results after the close of today's trading.