Stocks moved sharply higher over the course of the trading session on Thursday, with the major averages all closing firmly in positive territory after seeing some earlier uncertainty. As was the case in the previous session, a late day rally contributed to the higher close.
In corporate news, financial services giant JP Morgan (JPM) released its first quarter financial results before the start of trading, reporting earnings that fell year-over-year but came in above analyst estimates.
JP Morgan reported first-quarter net income of $0.40 per share compared to $0.67 per share in the year ago quarter. Analysts had expected the company to report earnings of $0.32 per share. Revenues also came in better than expected.
Additionally, mobile phone giant Nokia (NOK) generated some buying interest after the company reported first quarter earnings that fell sharply year-over-year but said it expects second quarter worldwide mobile device volume to be flat or show modest sequential growth.
On the economic front, a Commerce Department report showed that housing starts fell 10.8 percent to an annual rate of 510,000 in March from the revised February estimate of 572,000. Economists had expected starts to slip to 540,000 from the 583,000 originally reported for the previous month.
While acknowledging that the housing news was weak, John Petrides, growth portfolio manager at Advisors Capital Management, told RTT News that the data is a great sign for the economy, as fewer houses being built gives the market an opportunity to rebound as supply begins to narrow.
Meanwhile, the Labor Department said initial jobless claims fell to 610,000 from the previous week's revised figure of 663,000. Economists had expected jobless claims to edge up 658,000 from the 654,000 originally reported for the previous week. However, continuing claims rose to a new record high.
Separately, the Philadelphia Federal Reserve said its index of regional manufacturing activity rose to a negative 24.4 in April from a negative 35.0 in March. While a negative reading indicates a contraction in the sector, the index increased by much more than expected.
The major averages moved off their best levels of the day going into the close but still ended the day sharply higher. The Dow closed up 95.81 points or 1.2 percent at 8,125.43, the Nasdaq closed up 43.64 points or 2.7 percent at 1,670.44 and the S&P 500 closed up 13.24 points or 1.6 percent at 865.30.
With the gains, the Dow and the S&P 500 ended the session at their best closing levels in over two months, while the tech-heavy Nasdaq finished the day at its best closing level since early November of 2008.
As reflected by the strong upward move by the Nasdaq, technology stocks helped to lead the markets higher throughout much of the trading day. Computer hardware stocks posted particularly strong gains, with the Amex Computer Hardware Index closing up 4.7 percent, at a six-month closing high.
Within the hardware sector, Palm (PALM) turned in one of the best performances, with the handheld computer maker closing up 7.4 percent. Dell (DELL) and Lexmark (LXK) also posted notable gains.
Outside of the tech sector, significant strength was visible among housing stocks, as reflected by the 4.4 percent gain posted by the Philadelphia Housing Sector. The strength in the sector came as traders shrugged off the negative aspects of the bigger than expected drop in housing starts.
A variety of other sectors also showed strong upward moves over the course of the trading day, reflecting the broad based strength that emerged in the markets. Real estate, steel, and defense stocks turned in some of the best performances.
At the other end of the spectrum, gold stocks remained under pressure throughout the session amid a decrease by the price of the precious metal. With gold for June delivery closing down $13.70 at $879.80 an ounce, the Amex Gold Bugs Index closed down 5.5 percent.
Some health insurance stocks also bucked the uptrend by the broader markets, resulting in a 1.7 percent loss by the Morgan Stanley Healthcare Payor Index.
By the close of trading, the vast majority of the Dow components were well within positive territory, contributing to the substantial gain posted by the blue chip index.
Software giant Microsoft (MSFT) showed one of the strongest advances, ending the session up 4.9 percent. With the gain, Microsoft offset the losses posted in the two previous sessions to end the day at a three-month closing high.
Reflecting the strength in the computer hardware sector, Hewlett-Packard (HPQ) also moved sharply higher, closing up 5 percent. Disney (DIS), General Electric (GE), and Procter & Gamble (PG) were among the other Dow components that posted notable gains.
At the other end of the spectrum, Merck (MRK), Chevron (CVX), and Exxon Mobil (XOM) ended the day firmly in the red.
In overseas trading, the stock markets across the Asia-Pacific region turned in another mixed performance on Thursday, with most of the markets in the region pulling back off their highs after seeing early strength.
Meanwhile, the major European markets all closed firmly in positive territory. The French CAC 40 Index and the German DAX Index closed up 1.8 percent and 1.3 percent, respectively, while the U.K.'s FTSE 100 Index jumped 2.1 percent.
In the bond market, treasuries saw considerable weakness, closing just off their lows of the day. Subsequently, the yield on the benchmark 10-year note ended the session up 7.1 basis points at 2.83 percent.
Earnings are likely to remain in focus on Friday, with Google (GOOG) among the companies that have released their quarterly results after the close of trading today, while Citigroup (C) and GE are among the companies due to release their results before the start of trading tomorrow.
Additionally, the Reuters/University of Michigan consumer confidence index is due to be released at 9:55 a.m. ET, while Federal Reserve Chairman Ben Bernanke will delivery a keynote speech at a Kansas City Federal Reserve Bank conference at noon ET.
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