RTTNews - After a lackluster start to the session, stocks showed signs of life in afternoon trading on Thursday, ending the day sharply higher. The major averages all finished in positive territory by solid margins, extending a recent upward move despite largely mixed economic and earnings news.
On the economic front, a report from the Labor Department 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.
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.
However, analysts 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.
Meanwhile, 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.
On the earnings front today, JP Morgan Chase (JPM) reported second-quarter net income that blew away Wall Street estimates, but Xilinx Inc. (XLNX), Cintas (CTAS), Harley Davidson (HOG), and Marriott International (MAR) offered a mixed bag of results.
The major averages pulled back off of their best levels of the day heading into the close, but they were able to post considerable gains on the session. The Dow closed up by 95.61 points or 1.1 percent at 8,711.82, the Nasdaq climbed by 22.13 points or 1.2 percent to 1,885.03 and the S&P 500 rose by 8.06 points or 0.9 percent to 940.74.
Biotechnology stocks saw strong gains on the day, with the NYSE Arca Biotechnology Index rising by 3 percent on the session. The sector was led by shares of Human Genome Sciences (HGSI), which surged up by 21.8 percent, closing at its best level in nearly nine months.
Transportation stocks also rose on the day, with the Dow Jones Transportation Index posting a gain of 2.5 percent. With the climb, the index was able to finish at its best closing level in just over one month's time.
Steel and natural gas stocks led the way higher in the resource sector, with the NYSE Arca Steel Index and the NYSE Arca Natural Gas Index rising by 2.1 percent and 2 percent, respectively. The indices were able to build on their recent gains, closing at roughly one-month highs.
Computer hardware stocks also rose, with the NYSE Arca Computer Hardware Index advancing by 2 percent on the day. With the upward move, the index was able to end the session at its best closing level in over one year.
While semiconductor, healthcare provider, housing and computer technology stocks also advanced, modest weakness was visible in banking and brokerage stocks amid news that lending giant CIT Group (CIT) is facing the prospect of bankruptcy.
Most of the Dow components finished in the green, contributing to another strong outing by the blue chip index.
American Express (AXP) led the Dow higher for the second straight session, with the credit card giant closing up by 3.9 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 propelled the stock to its best finish in nearly ten weeks.
Shares of IBM Corp. (IBM) and Intel (INTC) also rose by notable margins, climbing by 3.2 percent and 2.5 percent, respectively. The day's gain propelled the tech giants to their best closing price in over nine months.
Strength was also visible in shares of diversified conglomerate 3M (MMM), which jumped by 2.3 percent. With the advance the stock finished at its best closing level in over eight months.
Alcoa (AA), Disney (DIS), Hewlett Packard (HPQ) and Caterpillar (CAT) also advanced by considerable margins, while Bank of America (BAC) and AT&T (T) posted notable losses.
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 saw moderate strength despite the solid gains on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 3.557 percent, a loss of 3.9 basis points.
Friday, traders will be reacting to quarterly results from IBM and Google (GOOG), which reported after the bell today, while Bank of America (BAC), Citigroup (C), Mattel (MAT), General Electric (GE) among the companies set to report during the day tomorrow.
The housing market will also be in focus on Friday, with the Commerce Department revealing June figures for building permits and housing starts. Analysts are looking for both of the numbers to remain nearly unchanged. The data is set to be revealed at 8:30 a.m. ET.
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