Stocks Close Higher Despite Continued Drop In Oil Prices - U.S. Commentary

(RTTNews) - With traders shrugging off a continued decrease by the price of crude oil, stocks managed to end Thursday's trading moderately higher. The gains on the day partly offset the losses posted in the three previous sessions.

The major averages pulled back well off their highs going into the close but still finished the day in positive territory. The Dow climbed 82.45 points or 0.5 percent to 17,574.75, the Nasdaq rose 22.31 points or 0.4 percent to 5,045.17 and the S&P 500 edged up 4.61 points or 0.2 percent to 2,052.23.

Bargain hunting contributed to the higher close on Wall Street following the recent pullback, which dragged the S&P 500 down its lowest closing level in almost a month.

The markets may also have benefited from traditional year-end buying, as December is typically a positive month for stocks.

Buying interest was somewhat subdued, however, with a continued decrease in commodities prices limiting the upside for the markets

The price of crude oil for January delivery fell $0.40 to $36.76 a barrel, once again ending the session at a new six-year closing low.

Traders may also have been looking ahead to the release of key reports on retail sales and producer prices on Friday as well as the highly anticipated Federal Reserve meeting next week.

The Labor Department released a report before the start of trading showing that initial jobless claims rose to a five-month high in the week ended December 5th.

The report said initial jobless claims climbed to 282,000, an increase of 13,000 from the previous week's unrevised level of 269,000. Economists had expected jobless claims to inch up to 270,000.

With the bigger than expected increase, jobless claims reached their highest level since hitting 296,000 in the week ended July 4th.

A separate report from the Labor Department showed that import prices fell less than expected in the month of November, although the report also showed a bigger than expected drop in export prices.

Sector News

Steel stocks saw substantial strength on the day, resulting in a 2.6 percent jump by the NYSE Arca Steel Index. With the gain, the index climbed further off the seven-year closing low set on Tuesday.

L.B. Foster (FSTR) turned in one of the steel sector's best performances after announcing its Board of Directors authorized the repurchase of up to $30 million worth of its common shares.

Considerable strength was also visible among electronic storage stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Disk Drive Index. Violin Memory (VMEM) posted a standout gain, soaring by 7.8 percent.

On the other hand, utilities stocks came under pressure on the day, dragging the Dow Jones Utilities Average down by 1.6 percent. Con Edison (ED) and American Electric Power (AEP) posted notable losses.

Networking, chemical, and tobacco stocks also saw significant weakness, with Ciena (CIEN) leading the networking sector lower after providing disappointing guidance.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region once again moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index tumbled by 1.3 percent, while Hong Kong's Hang Seng Index dropped by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index fell by 0.6 percent.

In the bond market, treasuries moved back to the downside after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.1 basis points to 2.239 percent.

Looking Ahead

Following a relatively quiet week on the economic front, trading on Friday may be impacted by the release of a slew of U.S. economic data, including reports on retail sales, producer prices, and consumer sentiment.