RTTNews - After experiencing choppy trading for much of the morning, stocks are seeing notable strength in mid-afternoon trading on Thursday, as buying interest has picked up following an encouraging report on the housing market. The major averages are all in positive territory, on pace to finish with gains for the fourth straight session.
This afternoon, the National Association of Home Builders released a report showing an increase in homebuilder confidence in the month of July, with homebuilders seeing an improvement in current sales conditions.
The report showed that the National Association of Home Builders/Wells Fargo Housing Market Index rose to 17 in July from 15 in June. With the increase, the index rose to its highest level since September of 2008.
Some early upside came on the heels of a report from the Labor Department, which showed that first time claims for unemployment benefits continued to decrease in the week ended July 11th, with initial jobless claims falling by more than economists had been expecting.
However, analysts have pointed out that seasonal issues in the auto sector have continued to impact jobless claims, skewing the data artificially lower.
Some pessimism on the day came after a Federal Reserve Bank of Philadelphia report showed that the index of manufacturing activity in the Mid-Atlantic region fell by more than economists had been expecting.
In earnings news, JP Morgan Chase (JPM) reported second-quarter net income that firmly beat Wall Street estimates, but Xilinx Inc. (XLNX), Cintas (CTAS), Harley Davidson (HOG), and Marriott International (MAR) offered a mixed bag of results, limiting the optimism.
After the close of trading today, traders will look to results from tech giants IBM Corp. (IBM) and Google (GOOG).
Traders are also keeping an eye on Capitol Hill, where former Treasury Secretary Henry Paulson is testifying before Congress, answering questions from lawmakers regarding the controversial Bank of America (BAC) and Merrill Lynch merger that took place late last year.
The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is currently up 62.81 at 8,679.02, the Nasdaq is up 14.74 at 1,877.64 and the S&P 500 is up 5.73 at 938.41.
Most of the Dow components have climbed into positive territory over the course of the trading day, contributing to the upward move by the blue chip index.
American Express (AXP) is leading the Dow higher for the second straight session, with the credit card giant currently up 4.2 percent.
Shares of American Express were bolstered by an upgrade from JP Morgan Chase, which raised its rating on the stock to Neutral from Underweight. The day's gain has propelled the stock to its best intraday price in nearly ten weeks.
Shares of Intel (INTC) and 3M (MMM) are also advancing by notable margins, rising by 2.1 percent and 1.9 percent, respectively. Intel reached its best intra-day level in more than nine months, while 3M rose to its highest intra-day price in over seven months.
Disney (DIS), IBM Corp. (IBM), Alcoa (AA) and Hewlett Packard (HPQ) are also helping the push the Dow higher. On the other hand, AT&T (T) and Wal-Mart (WMT) continue to post moderate losses.
Biotechnology stocks are adding to their strong gains with help from shares of Human Genome Sciences (HGSI), while semiconductor stocks are also continuing their advance. The Philadelphia Semiconductor is up by 1.6 percent, climbing to its best intraday level in over a month.
Significant strength has also emerged among steel, trucking, and computer hardware stocks, with the NYSE Arca Computer Hardware Index up by 1.6 percent, reaching its best intraday level in over a year.
Most of the other major sectors have also moved to the upside, with a substantial recovery by financial stocks also contributed to the rally by the broader markets.
In Focus: Economic, Earnings News
As mentioned above, the Philly Fed said its index of current activity fell to a negative 7.5 in July from a negative 2.2 in June, with a negative reading indicating a contraction in the sector. The index had been expected to slip to a reading of negative 4.8.
A separate report from the Labor Department showed that jobless claims fell to 522,000 from the previous week's revised figure of 569,000. Economists had been expecting jobless claims to fall to about 530,000 from the 565,000 originally reported for the previous week.
The earnings news was spearheaded by JP Morgan Chase, which reported second-quarter net income of $0.28 per share, compared with $0.53 in the second quarter of 2008. The results crushed Wall Street estimates, which forecast earnings of $0.04 per share.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Thursday, with Hong Kong's Hang Seng Index climbing by 0.6 percent and Japan's benchmark Nikkei 225 Index closing up by 0.8 percent.
The major European markets also closed on the upside by moderate margins, with the German DAX Index and the French CAC 40 Index closing up by 0.6 and 0.9 percent, respectively. The U.K.'s FTSE 100 Index also rose on the day, posting a gain of 0.4 percent.
In the bond markets, treasuries continue to post notable gains despite the uptick in equities in mid-afternoon trading. Subsequently, the yield on the benchmark ten-year note is trading at 3.532 percent, posting a loss of 6.4 basis points on the day.
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