With traders reacting positively to the latest batch of earnings and economic news, stocks are seeing continued strength in early afternoon trading on Thursday. While the major averages have pulled back off their best levels of the day, they remain firmly positive.

The strength in the markets is partly due to the release of a report from the Labor Department showing a notable decrease in first-time claims for unemployment benefits in the week ended April 25th. The data provided further signs of stabilization in the struggling labor market.

Before the start of trading, the Labor Department said that initial jobless claims fell to 631,000 from the previous week's revised figure of 645,000. Economists had expected jobless claims to come in unchanged compared to the 640,000 originally reported for the previous week.

However, the report showed a continued increase in continuing claims, which rose to another new record high of 6.271 million in the week ended April 18th. The continued increase suggests that people are having trouble finding jobs after they are laid off.

A separate report from the Institute for Supply Management - Chicago showed that activity in the Chicago-area manufacturing sector continued to contract in the month of April, although the pace of contraction slowed by even more than expected.

The report showed that the index of activity in the manufacturing sector rose to 40.1 in April from 31.4 in March, but a reading below 50 indicates a contraction in the sector. Economists had expected a more modest increase to a reading of 35.0.

In earnings news, shares of Dow Chemical (DOW) have moved sharply higher after the chemical giant reported first quarter earnings that showed a steep decline year-over-year but came in well above analyst estimates.

On the other hand, shares of Exxon Mobil (XOM) are seeing some weakness after the oil giant reported first quarter earnings that fell to $0.92 per share from $2.02 per share in the year-ago quarter and came in below analyst estimates of $0.95 per share.

Recently, traders have been focused on the White House, where President Barack Obama discussed the outlook for Chrysler, saying that the automaker would file for bankruptcy while it works to finalize a partnership with Italian automaker Fiat.

Obama said that he expects Chrysler's bankruptcy to be quick and minimally disruptive and said he believes the company will emerge from the process stronger and more competitive.

The major averages have moved roughly sideways in recent trading, holding onto strong gains. The Dow is currently up 58.86 at 8,244.59, the Nasdaq is up 30.82 at 1,742.76 and the S&P 500 is up 8.02 at 881.66.

Sector News

Continued strength among technology stocks is helping to keep the tech-heavy Nasdaq firmly in positive territory, with electronic storage stocks posting notable gains. The Amex Disk Drive Index is currently up 3.9 percent after reaching a six-month intraday high.

Seagate Technology (STX) is helping to lead the storage sector higher, with the hard drive maker rising 10.5 percent to its best intraday level in over six months. The gain by Seagate comes after Stifel Nicolaus upgraded its rating on the company's stock to Buy from Hold.

Within the tech sector, semiconductor, networking, and internet stocks are also seeing significant strength. Among internet stocks, Expedia (EXPE) is up 33.4 percent after reporting first quarter earnings that fell year-over-year but exceeded analyst estimates.

Steel stocks also continue to turn in some of the market's best performances amid some optimism about the outlook for demand. Significant strength also remains visible among chemical, transportation, and retail stocks.

At the other end of the spectrum, gold stocks are seeing continued weakness amid a notable decrease by the price of the precious metal. Considerable weakness has also emerged in the oil, tobacco, and utilities sectors.

Stocks In The News

Among individual stocks, shares of First Solar (FSLR) are seeing considerable strength in early afternoon trading, with the solar panel maker currently up 25 percent after reaching its best intraday level in almost seven months.

The gain by First Solar comes after the company reported a first quarter profit that more than tripled year-over-year and came in above analyst estimates. The company also revealed that it has initiated a process to recruit its next chief executive officer to succeed Michael Ahearn.

Biopharmaceutical company Human Genome Sciences (HGSI) has also shown a strong upward move after the company reported a better than expected first quarter profit versus a year-ago loss. Shares of Human Genome Sciences are currently up 24.5 percent.

Not all biotech stocks are moving higher, however, with shares of Sequenom (SQNM) down nearly 75 percent after the company reported a wider than expected first quarter loss and delayed the launch of its Down syndrome test due to employee mishandling of R&D test data and results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in strong performances on Thursday, with Japan's benchmark Nikkei 225 Index surging up 3.9 percent after the Japanese market was closed on Wednesday.

European stocks also saw considerable strength, although they gave back some ground going into the close. The U.K.'s FTSE 100 Index ended the day up 1.3 percent, while the French CAC 40 Index and the German DAX Index both advanced 1.4 percent.

In the bond market, treasuries are seeing some weakness, as traders move their money out of bonds and into stocks. Subsequently, the yield on the benchmark ten-year note is currently up 2.1 basis points at 3.117 percent after reaching a five-month high.

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