Positive Reaction To Earnings Leads To Rally On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved sharply higher over the course of the trading session on Thursday, as traders reacted positively to latest batch of earnings news. The major averages climbed firmly into positive territory after ending the previous session mixed.

The major averages pulled back off their best levels in the final hour of trading but held on to strong gains. The Dow jumped 238.51 points or 1 percent to 24,322.34, the Nasdaq soared 114.94 points or 1.6 percent to 7,118.68 and the S&P 500 surged up 27.54 points or 1 percent to 2,666.94.

The rally on Wall Street came following the release of upbeat earnings news from several big-name companies, with shares of Facebook (FB) surging up by 9.1 percent.

The jump by Facebook came after the social media giant reported first quarter results that beat analyst estimates on both the top and bottom lines.

Chipmaker Advanced Micro Devices (AMD) also moved sharply higher after reporting better than expected first quarter results.

Shares of Visa (V) also moved to the upside after the credit card giant reported fiscal second quarter results that exceeded expectations and raised its full-year guidance.

Stocks also benefited from a pullback by treasury yields, with the yield on the benchmark ten-year moving lower after ending the previous session above 3 percent for the first time in well over four years.

The drop by treasury yields came despite the release of some upbeat economic data, including a report from the Labor Department showing initial jobless claims fell to their lowest level in nearly five decades in the week ended April 21st.

The report said initial jobless claims dropped to 209,000, a decrease of 24,000 from the previous week's revised level of 233,000. Economists had expected jobless claims to edge down to 230,000.

With the much bigger than expected decrease, jobless claims slid to their lowest level since hitting 202,000 in December of 1969.

A separate report from the Commerce Department showed another jump in orders for transportation equipment contributed to a bigger than expected increase in durable goods orders in the month of March.

The Commerce Department said durable goods orders surged up by 2.6 percent in March after spiking by an upwardly revised 3.5 percent in February.

Economists had expected durable goods orders to climb by 1.6 percent compared to the 3.0 percent jump that had been reported for the previous month.

Excluding the skyrocketing orders for transportation equipment, however, durable goods orders came in unchanged in March compared to a 0.9 percent increase in February. Ex-transportation orders had been expected to rise by 0.5 percent.

Sector News

Retail stocks showed a substantial move to the upside on the day, driving the Dow Jones Retail Index up by 2.5 percent. Despite the gain, the index remained stuck in a recent trading range.

Among retail stocks, Amazon (AMZN) posted a notable gain ahead of the release of its first quarter results after the close of trading.

Significant strength was also visible among semiconductor stocks, as reflected by the 2.1 percent jump by the Philadelphia Semiconductor Index. The index bounced off its lowest closing level in well over two months.

Steel, energy, biotechnology, and real estate stocks also saw considerable strength on the day, while transportation stocks showed a notable move to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index slumped by 1.1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index advanced by 0.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index both climbed by 0.6 percent.

In the bond market, treasuries regained ground after trending lower over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 2.990 percent.

Looking Ahead

Earnings news is likely to remain in focus on Friday, with Amazon, Intel (INTC), and Microsoft (MSFT) among a slew of companies releasing their quarterly results after the close of today's trading.

Oil giants Chevron (CVX) and ExxonMobil (XOM) are also among the companies due to report their results before the start of trading on Friday.

Trading could also be impacted by reaction to a preliminary report on first quarter GDP as well as a revised report on consumer sentiment in April.