Stocks Continue To Perform Well In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving mostly higher early in the session, stocks have continued to perform well over the course of the trading day on Thursday. The gains on the day have lifted both the Dow and the S&P 500 to new record intraday highs.

The major averages have given back some ground in recent trading but remain firmly positive. The Dow is up 78.17 points or 0.5 percent at 17,235.02, the Nasdaq is up 20.65 points or 0.5 percent at 4,582.84 and the S&P 500 is up 6.66 points or 0.3 percent at 2,008.23.

The continued strength on Wall Street partly reflects a positive reaction to yesterday's monetary policy announcement from the Federal Reserve.

The Fed's statement has eased recent interest rate concerns, as the central bank reiterated its pledge to keep rates low for a "considerable time" as well as its assessment that "there remains significant underutilization of labor resources."

Meanwhile, traders seem to have shrugged off an increase in the median interest rate projections, as the five Fed governors are clearly more dovish than the regional presidents.

Positive sentiment has also been generated by a report from the Labor Department showing a sharp pullback in initial jobless claims in the week ended September 13th.

The report said initial jobless claims tumbled to 280,000, a decrease of 36,000 from the previous week's revised level of 316,000. Economists had been expecting jobless claims to edge down to 305,000.

On the other hand, the Commerce Department released a separate report showing that housing starts fell by much more than expected in the month of August.

The Commerce Department said housing starts plummeted 14.4 percent to a seasonally adjusted annual rate of 956,000 in August after jumping 22.9 percent to a revised July estimate of 1.117 million.

Housing starts had been expected to drop to an annual rate of 1.038 million from the 1.093 million originally reported for the previous month.

A report from the Philadelphia Federal Reserve also showed that its index of regional manufacturing activity pulled back off a three-year high in September.

Sector News

Financial stocks continue to see significant strength on the day, with banking and brokerage stocks both turning in strong performances.

The Dow Jones Banks Index and the NYSE Arca Broker/Dealer Index have advanced by 1.3 percent and 1.4 percent, respectively. Both indices have reached their best intraday levels in about six years.

Considerable strength has also emerged among airline stocks, as reflected by the 1.1 percent gain being posted by the NYSE Arca Airline Index. The strength in the sector comes amid a notable decrease by the price of crude oil.

Semiconductor stocks have also moved to the upside on the day, driving the Philadelphia Semiconductor Index up by 1 percent. The index reached a thirteen-year intraday high earlier in the session but has given back some ground since then.

Chemical, networking, and telecom stocks are also seeing some strength in mid-day trading, while gold and natural gas stocks have come under pressure.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region moved higher on Thursday. Japan's Nikkei 225 Index jumped by 1.1 percent, while China's Shanghai Composite rose by 0.4 percent. However, Hong Kong's Hang Seng Index bucked the uptrend and fell by 0.9 percent.

The major European markets all moved to the upside on the day. While the German DAX Index surged up by 1.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index advanced by 0.8 percent and 0.6 percent, respectively.

In the bond market, treasuries continue to see moderate weakness, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.3 basis points at 2.633 percent.