RTTNews - After seeing substantial weakness in the previous session, stocks regained some ground during trading on Thursday. The major averages all ended the day firmly in positive territory, as traders picked up stocks at reduced levels.
While the major averages saw some volatility in early trading, they showed a notable upward over the course of the morning and early afternoon. The Dow briefly dipped into negative territory early in the session but eventually closed up nearly 50 points.
The strength in the markets came as traders went bargain hunting following some recent weakness, shrugging off a report from the Labor Department showing a bigger than expected increase in first-time claims for unemployment benefits in the week ended May 9th.
The Labor Department said initial jobless claims rose to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000 from the 601,000 originally reported for the previous month.
Additionally, the report showed a continued increase in continuing claims, which rose to a new record high of 6.560 million in the week ended May 2nd from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
In other economic news, producer prices increased by a little more than expected in the month of April, according to a separate report released by the Labor Department, with the increase in prices partly due to a rebound in food prices.
On the earnings front, Wal-Mart (WMT) reported first-quarter earnings of $0.77 per share, nearly flat compared $0.76 per share in the same quarter of last year. The earnings came in line with analyst expectations.
Meanwhile, consumer electronics giant Sony (SNE) reported a fourth quarter net loss of $1.68 billion or $1.68 per share on revenues of $15.55 billion.
In other news, embattled automaker Chrysler revealed that it is planning to close a quarter of its dealerships as part of its effort to restructure. The announcement came as part of the company's bankruptcy court proceedings.
Permission for Chrysler-Fiat to cancel 789 of its 3,188 car dealership agreements has not yet been granted, but Chrysler has said that reducing the number of dealers is essential to its continued viability.
Additionally, President Barack Obama called on Congress to move swiftly to enact stronger regulations of the credit card industry in a town-hall style meeting in New Mexico.
The House has already passed a measure commonly called the Credit Card Holders' Bill of Rights and the Senate is debating and amending its own version of the measure this week. Proponents hope the Senate will be able to vote on the bill this week.
While the major averages moved off their highs going into the close, they remained firmly positive. The Dow closed up 46.43 points or 0.6 percent at 8,331.32, the Nasdaq closed up 25.02 points or 1.5 percent at 1,689.21 and the S&P 500 closed up 9.15 points or 1 percent at 893.07.
In overseas trading, stock markets across the Asia-Pacific region saw notable weakness on Thursday following the sell-off seen on Wall Street overnight. Japan's benchmark Nikkei 225 Index showed a steep decline, closing down 2.6 percent.
Meanwhile, the major European markets ended the day above the unchanged line, benefiting from some late day strength. The U.K.'s FTSE 100 Index rose 0.7 percent, while the French CAC 40 Index and the German DAX Index edged up 0.1 percent and 0.2 percent, respectively.
In the bond market, treasuries ended the day little changed after seeing some weakness earlier in the trading session. Subsequently, the yield on the benchmark ten-year note closed just above the unchanged line at 3.107 percent.
Real estate stocks showed considerable strength in afternoon trading, finishing as some of the top performers of the day. The Morgan Stanley Real Estate Index closed up by 3.7 percent in the session. With the move, the index moved off of the three-week low set in Wednesday's session.
One Liberty Properties (OLP) and Highwoods Properties (HIW) lead the sector higher, posting gains of 12.8 and 9.2 percent, respectively.
Significant strength was also visible among banking stocks, which drove the Dow Jones Banks Sector Index up 3.9 percent. The gain by the index came after it closed notably lower in the three previous sessions.
Additional strength was present in the semiconductor sector, with the Philadelphia Semiconductor Index closing 3.2 percent higher. Airline and trucking stocks also finished with strong gains for the session.
On the other hand, railroad and utility stocks bucked the uptrend in the broader markets, dragging the Dow Jones Railroads Index and the Philadelphia Utility Sector Index modestly lower.
A slew of economic data is scheduled to be released on Friday, including the Labor Department's report on consumer price inflation in the month of April. Economists expect consumer prices to come in unchanged after edging down 0.1 percent in March.
Trading could also be impacted by the release of reports on industrial production, consumer sentiment, and regional manufacturing activity.
Retail earnings are also likely to be in focus, with Nordstrom (JWN) due to release its quarterly results after the close of trading today, while JC Penney (JCP) and Abercrombie & Fitch (ANF) are among the companies due to release their results before the start of trading on Friday.
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