RTTNews - Stocks resumed their upward move Thursday following a modest pullback in the previous session. The major averages firmed their position in positive territory in mid-afternoon trading after an uncertain start to the day's session, posting strong gains on the day.

Ahead of the start of trading on Wall Street, traders were presented with employment data from the Labor Department that showed a decrease in first time jobless claims for the week ended May 30th. The report also indicated the first decrease in continuing claims in twenty weeks.

The data showed that initial jobless claims fell to 621,000 from the previous week's revised figure of 625,000. Economists had been expecting jobless claims to edge down to 620,000 from the 623,000 originally reported for the previous week.

The report also showed that continuing claims fell to 6.735 million in the week ended May 23rd from the preceding week's revised level of 6.750 million. The modest decrease in continuing claims breaks a recent streak of record highs and marks the first decrease since the week ended January 3rd.

In a separate report, the Labor Department revised its labor productivity figures for the first quarter, revealing a mild increase in the pace of growth. The report also showed that unit labor costs increased by less than previously estimated.

On the corporate front, membership warehouse operator Costco Wholesale (COST) reported a 7 percent drop in its comparable sales for the four-week period ended May 31, 2009, with a 5 percent decline in net sales.

A number of other retailers also reported their monthly sales results, with Abercrombie & Fitch (ANF), J.C. Penney (JCP), Bon-Ton (BONT) and American Apparel (APP) all reporting declining sales on a comparable store basis.

Retail giant Wal-Mart (WMT) did not release its monthly sales results, however, as the company announced last month that it would cease providing its monthly results.

The upward move seen over the course of the trading day came as traders shrugged off some uncertainty ahead of tomorrow's report from the Labor Department detailing the employment situation for the month of May.

The major averages saw further upside in late session trading and closed just off of their best levels of the day. The Dow climbed 74.96 points or 0.9 percent to 8,750.24, the Nasdaq finished up 24.10 points or 1.3 percent at 1,850.02 and the S&P 500 closed up 10.70 points or 1.1 percent at 942.46.

Sector News

The major sectors largely finished on the upside, contributing to the strong gains posted by the major indices on the day. Financial stocks helped to lead the way higher on the heels of some positive analyst comments.

Within the financial sector, brokerage stocks rallied on the day, as reflected by the 4.6 percent surge by the Amex Securities Broker/Dealer Sector Index. Knight Capital Group (NITE) climbed 7.1 percent on the day, reaching its best closing level in over three months.

Additionally, Raymond James Financial (RJF) also showed a strong upward move after its shares were upgraded to Market Perform from Underperform by FBR Capital. The target price on the shares was also boosted to $15 from $12. Shares of Raymond James closed up 7.2 percent.

Banking stocks also posted notable gains, with the Kbw Banking Index rising by 4.8 percent on the day. KeyCorp (KEY) helped to bolster the index, surging up 19.5 percent, rebounding from the multi-decade closing low set in the previous session.

Resource stocks also jumped, with gold, oil service and natural gas stocks all advancing considerably on the day. The strength in the sector came amid a rebound in commodity prices.

While most other sectors also moved higher, retail stocks saw some selling pressure, with the S&P Retail Index falling 1.1 percent amid the notable declines in comparable store sales reported by the nation's leading retailers. Airline stocks also pulled back on the day.

Dow Components

Most of the Dow components advanced on Thursday, helping the blue chip index to a notable gain on the day.

The Dow was boosted by shares of Alcoa (AA), which climbed by 6.2 percent to close at their best closing level in well over four months. The upward move came amid a notable increase in the price of aluminum.

Shares of airplane manufacturer Boeing (BA) rose by 4.6 percent, closing at a seven month high. The move came as United Airlines said it is seeking bids from Boeing and Airbus for up to 150 new planes. Reportedly, the deal could be worth more than $10 billion for the two firms.

Further, financial giants Citigroup (C), Bank of America (BAC), American Express (AXP), and JP Morgan Chase (JPM) also saw notable gains, helping to lead the rally in the Dow.

Limiting some of the day's gain by the Dow were shares of drug manufacturers, with Merck (MRK) and Pfizer (PFE) slipping by 2.3 and 1.7 percent, respectively.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished modestly lower on Thursday. Japan's benchmark Nikkei 225 Index slipped by 0.8 percent, while Hong Kong's Hang Seng fell by 0.4 percent.

Meanwhile, the major European markets finished modestly higher. The U.K.'s FTSE 100 Index closed up by 0.8 percent, while the French CAC 40 Index and the German DAX Index finished up by 0.1 percent and 0.2 percent, respectively.

In the bond market, treasuries saw notable weakness, closing just off of their worst levels of the day. Subsequently, the yield on the benchmark ten-year note finished at 3.72 percent, a jump of 16.5 basis points.

Looking Ahead

Friday's trading is likely to be impacted by the release of a key report on the health of the labor market from the U.S. Labor Department ahead of the opening bell on Wall Street.

The government's employment situation report for May is expected to show a slower pace of contraction in non-farm payrolls, with the headline figure forecasted to decline by 520,000 compared to a decline of 539,000 in April.

Nonetheless, the unemployment rate is expected to climb to a twenty-five year of 9.2 percent for May from 8.9 percent in the previous month.

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