Stocks Firmly Positive Following Upbeat Economic Data - U.S. Commentary

(RTTNews) - With traders reacting positively to a batch of largely upbeat economic data, stocks have moved notably higher during trading on Thursday. The gains on the day have lifted the Dow and the S&P 500 to new record intraday highs.

The major averages have given back some ground in recent trading but currently remain firmly positive. The Dow is up 99.97 points or 0.7 percent at 15,570.49, the Nasdaq is up 7.76 points or 0.2 percent at 3,617.76 and the S&P 500 is up 9.44 points or 0.6 percent at 1,690.35.

The strength on Wall Street comes on the heels of the release of some better than expected economic data, including a report from the Labor Department showing a bigger than expected pullback by initial jobless claims in the week ended July 13th.

The report said initial jobless claim fell to 334,000, a decrease of 24,000 from the previous week's revised figure of 358,000. Economists had been expecting jobless claims to dip to 345,000 from the 360,000 originally reported for the previous week.

While the data reflects some seasonal distortions, the report has added to recent optimism about the outlook for the labor market.

A separate report released by the Philadelphia Federal Reserve showed that its index of regional manufacturing activity unexpectedly jumped to a two-year high in July.

The Philly Fed said its diffusion index of current activity surged up to 19.8 in July from 12.5 in June, with a positive reading indicating an increase in regional manufacturing activity. The increase came as a surprise to economists, who had expected the index to drop to a reading of 9.0.

With the unexpected increase, the Philly Fed index reached its highest level since jumping to 36.1 in March of 2011.

Traders are also keeping an eye on Fed Chairman Ben Bernanke's second day of testimony on Capitol Hill, with the Fed chief appearing before the Senate Banking Committee.

Bernanke's prepared remarks mirrored those he delivered before the House Financial Services Committee on Wednesday, when he attempted to reassure the markets that the Fed will leave interest rates at low levels well after the central bank halts its asset purchase program.

Sector News

Health insurance stocks have shown a substantial move to the upside, driving the Morgan Stanley Healthcare Payor Index up by 3 percent. With the gain, the index has reached a record intraday high.

UnitedHealth (UNH) has helped to lead the health insurance sector higher, surging up by 5.7 percent after reporting better than expected second quarter earnings.

Significant strength is also visible among airline stocks, which are adding to the standout gains posted in the previous session. The NYSE Arca Airline Index has jumped 2.4 percent to its best intraday level in over six years.

Banking stocks are also seeing considerable strength in mid-day trading, with the KBW Bank Index up by 1.4 percent. The index has reached a nearly five-year intraday high.

Natural gas, oil service, and railroad stocks are also posting strong gains on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Thursday. Japan's Nikkei 225 Index surged up by 1.3 percent, while China's Shanghai Composite Index fell by 1.1 percent.

Meanwhile, the major European markets all showed strong moves to the upside on the day. While the French CAC 40 Index jumped by 1.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index both advanced by 1 percent.

In the bond market, treasuries have moved moderately lower on the heels of the largely upbeat economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.5 basis points at 2.526 percent.