RTTNews - Stocks are continuing to show significant strength in mid-afternoon trading on Thursday, with all of the major indices firmly in positive territory. With the upward move, equities look to snap three straight days of losses that came amid some profit taking following the recent run up.
The day's gains come as traders are doing some bargain hunting despite some disappointing employment data from the Labor Department released this morning.
In an interview with RTT News, Chuck Carlson, the CEO of Horizon Investment Services said that although the market has seen a tremendous rally since the March 9th lows, it is still a rally within an overall bear market trend.
Carlson predicted equities can move higher, but he warned, Ultimately we will get a pretty good pullback, one that could possibly retest the March lows. He added, This is not the beginning of the next big up-leg.
Earlier, traders digested a report from the Labor Department that showed initial jobless claims in the week ended May 9th climbed to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000.
Additionally, the data showed a continued increase in continuing claims, which rose to a new record high of 6.560 million in the week ended May 2nd from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
This afternoon, President Barack Obama called for Congress to move swiftly to enact stronger regulations of the credit card industry in a town-hall style meeting in a suburb of Albuquerque, New Mexico.
The House has already passed a measure commonly called the Credit Card Holders' Bill of Rights and the Senate is debating and amending its own version of the measure this week. Proponents hope the Senate will be able to vote on the bill this week.
Meanwhile, on the earnings front, Wal-Mart (WMT) reported first quarter earnings that came in line with analyst estimates, while Kohl's (KSS) reported first quarter results that came in better than expected.
In other news, Chrysler LLC has begun to restructure after filing for bankruptcy. The firm announced that it would cut 25 percent of its 3,200 dealerships, looking to replace a number of their embattled sales centers.
Elsewhere, the New York Federal Reserve continued its treasury buyback program, purchasing $2.98 billion worth of securities with maturity dates ranging from May of 2010 to February of 2011.
The day's buyback attracted considerably strong interest, with a total of $27.09 billion in treasuries submitted for the purchase. With the purchase, the government has bought back $104.69 billion in treasuries since the purchase program began on March 25th.
The major averages have continued to move higher in recent trading, once again rising to new highs for the session. The Dow is currently up 84.03 at 8,368.92, the Nasdaq is up 36.17 at 1,700.36 and the S&P 500 is up 13.82 at 897.74.
Most of the Dow components are firmly in positive territory, contributing to the strong gain being shown by the blue chip index in mid-afternoon trading.
Intel (INTC) is turning in one of the Dow's strongest performances, with the world's largest semiconductor firm rising by 3.5 percent. With the upward move, shares of Intel are bouncing off the two-week low set in the previous session.
Financial stocks are also boosting the Dow, with Citigroup (C), JP Morgan Chase (JPM), and American Express (AXP) posting strong gains.
Despite the broad based gains, shares of General Motors (GM) have come under pressure, falling 5 percent on the day. With the move, the stock has pulled back near its worst levels since the Great Depression.
Additionally, shares of Wal-Mart are down 1.9 percent even though the retail giant reported first quarter earnings that came in line with analyst estimates.
Gains by airline stocks have added to the strength in transportation sector on the day, with the Amex Airline Index climbing by 4.1 percent. With the advance, the index has bounced off of the two-week closing low set in the previous session.
Real estate stocks are also showing considerable gains in mid-afternoon dealing, driving the Morgan Stanley Real Estate Index up 4.7 percent. The index is moving well off the three week low set in the previous session.
Additionally, semiconductor stocks also continue to turn in strong performances, with the Philadelphia Semiconductor Index up by 4 percent. Significant strength has also emerged among banking and healthcare provider stocks.
On the other hand, some utilities stocks are bucking the uptrend by the broader markets, dragging the Dow Jones Utilities Average modestly lower.
In overseas trading, stock markets across the Asia-Pacific region saw notable weakness on Thursday following the sell-off seen on Wall Street overnight. Japan's benchmark Nikkei 225 Index showed a steep decline, closing down 2.6 percent.
Meanwhile, the major European markets moved higher over the course of the trading day. The U.K.'s FTSE 100 Index closed up 0.7 percent, while the French CAC 40 Index and the German DAX Index rose 0.1 and 0.2 percent, respectively.
In the bond market, treasuries are seeing some volatility, with the yield on the benchmark ten-year note essentially unchanged at 3.105 percent.
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