Buying interest has waned from earlier in the session, but stocks remain mostly positive in early afternoon trading on Thursday. With the upward move, the major averages are adding to the gains posted in the previous session.
Currently, the major averages are holding on to modest gains. The Dow is up 151.17 points or 0.4 percent at 34,474.22, the Nasdaq is up 28.01 points or 0.2 percent at 13,766.00 and the S&P 500 is up 13.66 points or 0.3 percent at 4,209.65.
The strength on Wall Street may partly reflect continued optimism about the economy after the Labor Department released a report showing weekly jobless claims once again fell to a new pandemic-era low.
The Labor Department said initial jobless claims slid to 406,000 in the week ended May 22nd, a decrease of 38,000 from the previous week’s unrevised level of 444,000. Economists had expected jobless claims to dip to 425,000.
Jobless claims decreased for the fourth consecutive week, once again falling to their lowest level since hitting 256,000 in the week ended March 14, 2020.
However, traders remain on edge, as the upbeat data has added to recent concerns about the Federal Reserve moving closer to tapering its asset purchases.
Traders are likely to pay close attention to Friday’s reading on inflation said to be preferred by the Fed, which could have a significant impact on the outlook for monetary policy.
A separate report from the Commerce Department showed an unexpected pullback in durable goods orders in April, although the decrease was largely due to a steep drop in orders for transportation equipment.
The report showed durable goods orders tumbled by 1.3 percent in April after jumping by an upwardly revised 1.3 percent in March.
The pullback surprised economists, who had expected durable goods orders to climb by 0.7 percent compared to the 0.8 percent increase that had been reported for the previous month.
Excluding a 6.7 percent slump in orders for transportation equipment, however, durable goods orders shot up by 1.0 percent in April after spiking by 3.2 percent in March. Economists had expected 0.8 percent growth.
The Commerce Department also released a report showing the pace of U.S. economic growth in the first quarter was unrevised from the advance estimate.
The report showed real gross domestic product spiked by 6.4 percent in the first quarter, unchanged from the estimate provided last month. Economists had expected a modest upward revision in the pace of GDP growth to 6.5 percent.
Meanwhile, a report released by the National Association of Realtors showed pending home sales in the U.S. unexpectedly tumbled to their lowest level in nearly a year in the month of April.
Steel stocks continue to see substantial strength on the day following news of the first meeting between U.S. Trade Representative Katherine Tai and Chinese Vice Premier Liu He.
A statement from the Chinese Commerce Ministry described the virtual meeting as “candid, pragmatic and constructive” but did not reveal if the discussions included rolling back Trump-era tariffs.
Reflecting the strength in the steel sector, the NYSE Arca Steel Index has surged up by 2.7 percent, climbing further off the nearly-one month closing low set on Tuesday.
Considerable strength has also emerged among oil service stocks, as reflected by the 1.4 percent gain being posted by the Philadelphia Oil Service Index.
The strength in the oil service sector comes as the price of crude oil has once again turned higher, with crude for July delivery rising $0.33 to $66.54 a barrel after falling as low as $65.37 a barrel.
Networking stocks also continue to turn in a strong performance, driving the NYSE Arca Networking Index up by 1.4 percent to its best intraday level in over three months.
Banking, transportation and telecom stocks are also seeing notable strength on the day, while most of the other major sectors are showing only modest moves.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index rose by 0.4 percent.
The major European markets also ended the day mixed. While the French CAC 40 Index advanced by 0.7 percent, the U.K.’s FTSE 100 Index edged down by 0.1 percent and the German DAX Index dipped by 0.3 percent.
In the bond market, treasuries are seeing further downside after ending the previous session slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.3 basis points at 1.617 percent.
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