While buying interest has waned somewhat from earlier in the session, significant strength remains visible on Wall Street in mid-afternoon trading on Thursday, as investors react positively to news from the G20 summit in London as well as some mixed economic news.
In an interview with RTT News, Donald Selkin, chief investment strategist at National Securities, called the current rally the end of the bear market. I do believe the lows will hold, which means that the bear market is over, he said.
However, Selkin expressed concern about going into Friday's jobs report with such strength because it limits the potential for upside surprises.
Selkin acknowledged that there are still a lot of minefields out there, highlighting the upcoming earnings season, but he said the best strategy for investors right now is to buy on pullbacks.
Global leaders announced earlier that the G20 Summit in London is focused on promoting global trade and rejecting protectionism. The high-profile sit-down was convened as world leaders attempt to address the steepest global downturn since the Great Depression, and in the official communiqué G20 members pledged to do whatever necessary to end the economic crisis.
British Prime Minister Gordon Brown addressed the media earlier, noting that the summit was very productive and that the issues that people thought divided us did not divide us at all.
There was substantial agreement on the need for us to do whatever is necessary to return to growth, he said.
Brown noted that G20 members have agreed to a fiscal stimulus worth around $5 trillion, as well as tripling funding to the International Monetary Fund to $750 billion in order to assist poor nations at this trying time.
On the economic front, the Labor Department said that initial jobless claims in the week ended March 28th unexpectedly rose to 669,000 from the previous week's revised figure of 657,000. With the increase, jobless claims rose to a new twenty-six year high.
While the data added to concerns about Friday's monthly employment report, Peter Boockvar of Miller Tabak noted, Participants are looking past this employment data and placing their chips on the 'worst is over' belief and the still worsening labor market is a lagging indicator.
Additionally, a report from the Commerce Department showing that factory orders rose 1.8 percent in February added to recent signs of stabilization in the economy, although the report also showed a notable downward revision to the data for January.
The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory but off their best levels of the day. The Dow is currently up 252.56 at 8,014.16, the Nasdaq is up 54.95 at 1,606.55 and the S&P 500 is up 26.38 at 837.46.
Nearly all of the Dow components are moving higher on the day, contributing to the substantial gain being shown by the blue chip index.
Alcoa (AA) is showing one of the biggest upward moves, with the aluminum producer currently up 8.7 percent. With the advance, the stock has broken through recent resistance to reach its best intraday level in nearly two months.
Caterpillar (CAT), DuPont (DD), and Disney (DIS) are also showing notable upward moves. Caterpillar is posting a gain of 9.3 percent on the day, while DuPont and Disney are showing advances of 7.6 percent and 7.3 percent, respectively.
Additionally, General Electric (GE), United Technologies (UTX), and Boeing (BA) are also posting considerable gains on the session.
At the other end of the spectrum, JP Morgan (JPM) and Pfizer (PFE) are currently the only two declining blue chip stocks. JP Morgan is down 1.7 percent, while Pfizer is posting a more modest 0.7 percent loss.
While steel stocks are leading the broader markets higher, notable strength is also coming out of the transportation sector. The Dow Jones Transportation Average is currently posting a 8.1 gain percent on the day, climbing to its highest level in over a month and a half.
Oil services, housing, and real estate stocks are also posting considerable gains, with the Philadelphia Oil Services Index up 6.4 percent, while the Philadelphia Housing Index and the Morgan Stanley REIT Index are posting gains of 5.2 percent and 6 percent, respectively.
Meanwhile, gold stocks remain some of the only losers of the day, as the price of the precious metal has fallen $18.80 to $908.90 an ounce. The Amex Gold Bugs Index is down 4.3 percent.
In overseas trading, stock markets across the Asia-Pacific region closed considerably higher on Thursday amid some optimism about the outlook for the economy. Hong Kong's Hang Seng ended the session significantly higher, closing up more than 1,000 points or 7.4 percent.
Additionally, the major European markets closed near their highs of the day. The French CAC 40 Index and the German DAX Index finished the session up 5.4 percent and 6.1 percent, respectively, while the U.K.'s FTSE 100 Index posted a gain of 4.3 percent.
In the bond market, treasuries have come off their lows of the day but remain well below the unchanged line. Subsequently, the yield on the benchmark 10-year note is up 7.5 basis points at 2.733 percent.
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