Stocks Close Higher After Recovering From Initial Weakness - U.S. Commentary

(RTTNews) - After recovering from an early move to the downside, stocks moved mostly higher over the course of the trading day on Thursday. With the gains on the day, the Dow and the S&P 500 once again reached new record closing highs.

The major averages ended the session near their best levels of the day. The Dow rose 33.27 points or 0.2 percent to 17,719.00, the Nasdaq advanced 26.16 points or 0.6 percent to 4,701.87 and the S&P 500 climbed 4.03 points or 0.2 percent to 2,052.75.

The initial weakness on Wall Street was partly due to renewed worries about the outlook for the global economy following the release of disappointing Chinese manufacturing data.

The results of a preliminary survey by HSBC and Markit Economics showed that Chinese manufacturing activity stagnated in November. The manufacturing index fell 0.4 points to 50, while economists expected a reading of 50.2 for the month.

A separate report from Markit showed that European manufacturing activity grew at a slower rate in the month of November.

Selling pressure waned not long after the start of trading, however, and stocks subsequently rebounded on the heels of the release of some upbeat U.S. economic data.

The National Association of Realtors released a report showing an unexpected increase in existing home sales in the month of October.

NAR said existing home sales climbed 1.5 percent to a seasonally adjusted annual rate of 5.26 million in October from an upwardly revised 5.18 million in September. Economists had expected existing home sales to edge down to 5.15 million.

Additionally, the Philadelphia Federal Reserve said its regional manufacturing index jumped to its highest level in over twenty years in November.

Sector News

Following the pullback seen in the previous session, gold stocks showed a strong move back to the upside on the day. The NYSE Arca Gold Bugs Index surged up by 2.4 percent after ending Wednesday's trading down by 6 percent.

Strong gains by Allied Nevada Gold (ANV) and Tanzanian Royalty Exploration Corp. (TRX) contributed to the rebound by the gold sector, which came despite a decrease by the price of the precious metal.

Networking stocks also saw significant strength, driving the NYSE Arca Networking Index up by 1.6 percent. With the gain, the index reached its best closing level in over seven months.

Benefiting from the upbeat existing home sales data, housing stocks also turned in a strong performance on the day. The Philadelphia Housing Sector Index jumped 1.4 percent to an eight-month closing high.

Energy, trucking, and computer hardware stocks also saw notable strength, with energy stocks moving higher along with the price of crude oil.

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 inched up by 0.1 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

The major European markets also ended the trading day mixed. While the German DAX Index crept up by 0.1 percent, the U.K.'s FTSE 100 Index dropped by 0.3 percent and the French CAC 40 Index fell by 0.8 percent.

In the bond market, treasuries pulled back after seeing early strength but managed to close modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.6 basis points to 2.335 percent.

Looking Ahead

Following today's slew of data, the economic calendar is relatively quiet on Friday, potentially leading to light trading activity.

On the earnings front, apparel retailer Gap (GPS) is among the companies releasing their quarterly results after the close of today's trading.