Stocks Close Higher After Recovering From Early Decline - U.S. Commentary

(RTTNews) - After falling rather sharply early in the session, stocks showed a substantial turnaround over the course of the trading day on Thursday. With the recovery on the day, the major averages snapped a five-session losing streak.

The major averages eventually finished the session moderately higher. The Dow climbed 92.93 points or 0.5 percent to 17,733.10, the Nasdaq edged up 9.98 points or 0.2 percent to 4,844.92 and the S&P 500 rose 6.49 points or 0.3 percent to 2,077.99.

The rebound by stocks was partly due to bargain hunting, with traders picking up stocking at reduced levels as the major averages hit their lowest intraday levels in almost a month.

Early selling pressure was seen on the heels of inaction by global central banks, including the Bank of Japan and the Federal Reserve.

The Bank of Japan announced its decision to hold interest rates steady overnight and did not offer additional monetary stimulus.

The decision led to a jump in the value of the safe-haven yen, which reached its highest levels against the U.S. dollar since August of 2014.

The announcement by the Japanese central bank came on the heels of the Fed's widely expected decision to leave interest rates unchanged on Wednesday.

The Fed also seemed to offer a dovish assessment of the outlook for interest rates, with six Fed officials now expecting only one rate hike by the end of the year.

The decision was partly attributed to concerns about the upcoming referendum on Britain's membership in the European Union.

The Bank of England also maintained its monetary policy amid concerns about the vote on the so-called Brexit next Thursday.

On the U.S. economic front, the Labor Department released a report before the start of trading showing that consumer prices rose by slightly less than expected in the month of May.

The Labor Department said its consumer price index edged up by 0.2 percent in May after climbing by 0.4 percent in April. Economists had expected prices to rise by 0.3 percent.

Excluding food and energy prices, the core consumer price index also rose by 0.2 percent, matching the increase seen in the previous month as well as economist estimates.

A separate report from the Labor Department showed a bigger than expected increase in initial jobless claims in the week ended June 11th.

The report said initial jobless claims rose to 277,000, an increase of 13,000 from the previous week's unrevised level of 264,000. Economists had expected jobless claims to edge up to 270,000.

Meanwhile, the National Association of Home Builders released a report showing a bigger than expected improvement in homebuilder confidence in June.

Sector News

While the broader markets turned higher over the course of the session, gold stocks came under pressure after seeing early strength. After rising as much as 3.2 percent, the NYSE Arca Gold Bugs Index tumbled by 3.2 percent.

The pullback by gold stocks came as the price of the precious metal gave back ground after reaching its highest intraday level in almost two years. Gold for August delivery still ended the day up $10.10 at $1,298.40 an ounce.

Considerable weakness also remained visible among oil service stocks, as reflected by the 1.9 percent drop by the Philadelphia Oil Service Index. The weakness in the sector came as crude oil for July delivery slumped $1.80 to $46.21 a barrel.

Airline and natural gas stocks also remained stuck firmly in negative territory, while strength was visible among electronic storage, utilities, and software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index plunged by 3.1 percent, while Hong Kong's Hang Seng Index tumbled by 2.1 percent.

European stocks also ended the day in the red but well off their worst levels of the day. While the U.K.'s FTSE 100 Index dipped by 0.3 percent, the French CAC 40 Index and the German DAX Index fell by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries gave back some ground after seeing early strength but remained in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.2 basis points to a nearly four-year closing low of 1.564 percent.

Looking Ahead

Following the slew of data released this morning, the economic calendar for Friday is relatively quiet, but traders are likely to keep an eye on a report on housing starts.

On the earnings front, Oracle (ORCL), Marvell (MRVL), and Smith & Wesson (SWHC) are among the companies releasing their quarterly results after the close of today's trading.