Stocks Close Sharply Higher Amid Rebound By Oil Prices - U.S. Commentary

(RTTNews) - After showing a lack of direction throughout much of the previous session, stocks moved sharply higher over the course of the trading day on Thursday. The Dow closed higher for the fourth consecutive session, reaching its best closing level in almost a month.

The major averages saw further upside going into the close, ending the session near their highs for the session. The Dow jumped 211.86 points or 1.2 percent to 17,884.88, the Nasdaq climbed 48.39 points or 1 percent to 4,765.10 and the S&P 500 advanced 21.01 points or 1 percent to 2,062.52.

A notable rebound by the price of crude oil contributed to the strength on Wall Street, with crude regaining some ground following the sharp pullback seen on Wednesday.

Crude for March delivery jumped $2.03 to $50.48 a barrel on the day after plunging $4.60 to $48.45 a barrel in the previous session.

Positive sentiment was also generated by a report from the Labor Department showing a smaller than expected rebound in initial jobless claims in the week ended January 31st.

The report said initial jobless claims rose to 278,000, an increase of 11,000 from the previous week's revised level of 267,000. Economists had expected jobless claims to climb to 290,000.

The release of the weekly report comes ahead of the release of the more closely watched monthly jobs report before the start of trading on Friday.

Meanwhile, traders largely shrugged off separate reports on fourth quarter productivity and the December trade deficit as old news.

While the trade deficit widened, Paul Ashworth, Chief U.S. Economist at Capital Economics, said the data was broadly in line with assumptions made by the Bureau of Economic Analysis, likely resulting in no revisions to fourth quarter GDP growth.

Additionally, the continued advance by the Dow partly reflected a strong gain by Pfizer (PFE), with the drug giant jumping by 2.9 percent after agreeing to acquire Hospira (HSP) for about $16 billion.

Sector News

Rebounding along with the price of crude oil, oil service stocks showed a strong move to the upside on the day. The Philadelphia Oil Service Index surged up by 2.6 percent, partly offsetting the 3 percent loss posted on Wednesday.

Weatherford International (WFT) turned in one of the oil service sector's best performances after announcing plans to cut up to 8,000 jobs.

Biotechnology stocks also regained some ground following recent weakness, driving the NYSE Arca Biotechnology Index up by 2.4 percent. ImmunoGen (IMGN) and Regeneron (REGN) posted notable gains.

Considerable strength was also visible among chemical stocks, as reflected by the 2.3 percent gain posted by the Dow Jones Chemicals Index. With the gain, the index reached a two-month closing high.

Steel, networking, natural gas, and electronic storage stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

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 slumped by 1 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

The major European markets also ended the day mixed. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index crept up by 0.1 percent and 0.2 percent, respectively.

In the bond market, treasuries moved modestly lower, pulling back further off their recent highs. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by 1.8 basis points to 1.815 percent.

Looking Ahead

The monthly jobs report is likely to be in focus on Friday, with traders expecting an increase of about 230,000 jobs in January following the addition of 252,000 jobs in December. The unemployment rate is expected to hold at 5.6 percent.

On the earnings front, Activision Blizzard (ATVI), Buffalo Wild Wings (BWLD), Expedia (EXPE), GoPro (GPRO), LinkedIn (LNKD), and Twitter (TWTR) are among the companies releasing their quarterly results after the close of today's trading.