Stocks Close Modestly Higher But Well Off Best Levels - U.S. Commentary

(RTTNews) - After moving sharply higher at the open, stocks gave back ground over the course of the trading day on Thursday but managed to close modestly high. The gains on the day came on the heels of the sell-off that was seen in the previous session.

The major averages closed in positive territory but well off their best levels of the day. The Dow crept up 33.20 points or 0.2 percent to 17,548.62, the Nasdaq rose 12.64 points or 0.3 percent to 4,922.40 and the S&P 500 edged up 4.63 points or 0.2 percent to 2,051.31.

The initial strength on Wall Street was partly in reaction to a substantial rebound by Chinese stocks with the Shanghai Composite Index surging up by 5.8 percent as authorities unveiled fresh support measures.

In a bid to curb crashing prices, China's securities regulator banned senior management and investors who own stakes in businesses exceeding 5 percent from selling their shares for next six months.

China's central bank also said it would provide sufficient liquidity to China Securities Finance Corp., the state-backed margin finance company.

Additionally, the China Banking Regulatory Commission said it would encourage banks to support companies' share buybacks by offering them collateralized loans.

Early buying interest was also generated by optimism about a deal between Greece and its creditors after the debt-laden nation promised to implement pension and tax reforms to win fresh aid.

Greek Prime Minister Alexis Tsipras told European parliament that he would submit a detailed reform plan later today.

However, the positive sentiment was partly offset by news that the International Monetary Fund lowered its forecast for global economic growth in 2015.

The IMF said it expects the global economy to grow by 3.3 percent this year compared to its previous forecast for 3.4 percent.

The lender attributed the reduced forecast to the weakness seen in the U.S. during the first quarter. The IMF also warned that the problems in China and Greece cloud the outlook.

Sector News

Despite the pullback by the broader markets, significant strength remained visible among airline stocks. Reflecting the strength in the airline sector, the NYSE Arca Airline Index jumped 1.6 percent, bouncing off its worst closing level in eight months.

China Southern Airlines (ZNH) posted a standout gain within the airline sector, soaring by 13.3 percent amid the rebound by Chinese stocks.

Biotechnology stocks also regained some ground following yesterday's sell-off, with the NYSE Arca Biotechnology Index climbing by 1.4 percent. Novavax (NVAX) helped to lead the sector higher, surging up by 11 percent.

Financial, trucking, and oil service stocks also saw considerable strength but closed well off their highs for the session.

On the other hand, computer hardware and semiconductor stocks came under pressure as the day progressed, dragging the NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index down by 1.6 percent and 1.3 percent, respectively.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region rebounded on Thursday after seeing early weakness. Japan's Nikkei 225 Index advanced by 0.6 percent, while Hong Kong's Hang Seng Index surged up by 3.7 percent.

The major European markets also showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index shot up by 1.4 percent, the German DAX Index and the French CAC 40 Index soared by 2.3 percent and 2.6 percent, respectively.

In the bond market, treasuries gave back ground after moving sharply higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 9.5 basis points to 2.301 percent.

Looking Ahead

News regarding the Greek debt negotiations is likely to be in focus on Friday along with a speech by Federal Reserve Chair Janet Yellen.