Stocks Close Mostly Higher But Off Best Levels Of The Day - U.S. Commentary

(RTTNews) - After showing a strong upward move in morning trading on Thursday, stocks gave back some ground in the afternoon but still ended the day mostly higher. The markets benefited from easing concerns about Syria as well as some upbeat economic data.

The major averages all ended the day in positive territory, although the Nasdaq outperformed its counterparts. While the Nasdaq climbed 26.95 points or 0.8 percent to 3,620.30, the Dow inched up 16.44 points or 0.1 percent to 14,840.95 and the S&P 500 edged up 3.21 points or 0.2 percent to 1,638.17.

The early strength on Wall Street reflected signs that demands from Congress as well as skepticism from the American public seem to have put the brakes on an imminent attack on Syria, which officials previously said could begin as early as tonight.

In an interview with the PBS NewsHour, President Barack Obama claimed he has not made a decision on military action against Syria, countering the reports that an attack was a foregone conclusion.

Britain also signaled that it would wait for the outcome of a United Nations investigation of Syria's alleged use of chemical weapons before taking action.

Military action against Syria in the near future remains a strong possibility, however, leading to some trepidation among traders.

Traders were also digesting a pair of upbeat U.S. economic reports, including a Labor Department report showing a modest drop in weekly jobless claims and a Commerce Department report showing stronger than previously estimated GDP growth in the second quarter.

The reports suggest that the economic recovery remains on track but reinforce expectations that the Federal Reserve will begin tapering its monthly asset purchases in September.

The Labor Department said initial jobless claims edged down to 331,000 in the week ended August 24th, a decrease of 6,000 from the previous week's revised figure of 337,000. The modest drop came roughly in line with economist estimates.

Separately, the Commerce Department released a report showing that GDP increased by 2.5 percent in the second quarter, reflecting an upward revision from the advance estimate of 1.7 percent growth.

Sector News

Airline stocks managed to hold on to strong gains for the session, resulting in a 2 percent advance by the NYSE Arca Airline Index. The gain by the index came after it ended the previous session at a two-month closing low.

The rebound by airline stocks came as the price of crude oil gave back some ground after surging higher over the past few sessions. Crude for October delivery dipped $1.30 to $108.80 a barrel.

Considerable strength also remained visible among housing stocks, as reflected by the 1.7 percent gain posted by the Philadelphia Housing Sector Index. With the gain, the index bounced off the eight-month closing low set on Wednesday.

Semiconductor, biotechnology, and brokerage stocks also turned in strong performances, while oil stocks gave back ground amid the drop by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index ended the day up by 0.8 percent.

The major European markets also moved to the upside on the day. While the German DAX Index rose by 0.5 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index climbed by 0.7 percent and 0.8 percent, respectively.

In the bond market, treasuries turned higher over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.751 percent after reaching a high of 2.83 percent.

Looking Ahead

Another batch of economic data may attract attention on Friday, with traders likely to keep an eye on reports on personal income and spending, consumer sentiment, and Chicago business activity. Trading could also be impacted by any developments regarding Syria.