Stocks Move Back To The Upside, Lifting Dow Above 16,000 - U.S. Commentary

(RTTNews) - Stocks moved notably higher over the course of the trading day on Thursday, largely offsetting the weakness seen over the past few sessions. With the strength on the day, the Dow reached a new record closing high above 16,000.

The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Dow climbed 109.17 points or 0.7 percent to 16,009.99, the Nasdaq jumped 47.88 points or 1.2 percent to 3,969.15 and the S&P 500 advanced 14.48 points or 0.8 percent to 1,795.85.

The strength on Wall Street came as traders picked up stocks at somewhat reduced levels following the recent pullback, which dragged the S&P 500 down well off last Friday's record closing high.

Positive sentiment was also generated by a report from the Labor Department showing a bigger than expected drop in initial jobless claims in the week ended November 16th.

The report said initial jobless claims dropped to 323,000, a decrease of 21,000 from the previous week's revised figure of 344,000. Economists had been expecting initial jobless claims to dip to 335,000.

With the bigger than expected drop, jobless claims further offset the sharp jump seen in the first week of October, which largely reflected technical issues.

A separate report from the Labor Department showed a modest decrease in producer prices in the month of October, with the drop largely due to a steep decline in energy prices.

The Labor Department said its producer price index dipped by 0.2 percent in October after edging down by 0.1 percent in September. The drop by the index matched economist estimates.

Core producer prices, which exclude food and energy, rose by 0.2 percent in October after inching up by 0.1 percent in the previous month. Core prices had been expected to tick up by 0.1 percent.

Meanwhile, the Philadelphia Federal Reserve released a report showing a much bigger than expected drop by its index of regional manufacturing activity.

The Philly Fed said its diffusion index of current activity tumbled to 6.5 in November from 19.8 in October. While a positive reading indicates continued growth in manufacturing activity, economists had expected a much more modest decrease to a reading of 15.5.

Sector News

Brokerage stocks showed a substantial upward move over the course of the trading day, driving the NYSE Arca Broker/Dealer Index up by 2.2 percent. The gain extended a recent upward trend by the index, which reached its best closing level in over five years.

KCG Holdings (KCG), MarketAxess (MKTX), and Stifel Financial (SF) turned in some of the brokerage sector's best performances.

Considerable strength was also visible among biotechnology stocks, as reflected by the 2.1 percent gain posted by the NYSE Arca Biotechnology Index. With the gain, the index set a record closing high.

Semiconductor stocks also turned in a strong performance on the day, with the Philadelphia Semiconductor Index advancing by 1.7 percent. Micron (MU) helped lead the sector higher after Greenlight Capital manager David Einhorn said he is long on the stock.

Banking, networking, and housing stocks also moved notably higher, reflecting the broad based buying interest on Wall Street.

Meanwhile, gold stocks bucked the uptrend amid a decrease by the price of the precious metal. With gold for December delivery falling $14.40 to $1,243.60 an ounce, the NYSE Arca Gold Bugs Index dropped by 1.7 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. Hong Kong's Hang Seng Index and Australia's All Ordinaries Index dropped by 0.5 percent and 0.4 percent, respectively. However, Japan's Nikkei 225 Index bucked the downtrend and jumped 1.9 percent.

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

In the bond market, treasuries closed slightly higher after recovering from an early move to the downside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.784 percent after reaching a high of 2.839 percent.

Looking Ahead

Following the slew of economic reports released over the past two days, trading activity on Friday may be somewhat subdued amid a lack of major U.S. economic data.

Gap (GPS), Intuit (INTU), and Pandora Media (P) may be in focus after releasing their quarterly results after the close of today's trading.