Stocks Holding On To Strong Gains In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving to the upside in early trading on Thursday, stocks have continued to perform well over the course of the session. With the gains on the day, the major averages have offset the weakness seen in the previous session and continue to recover from Monday's sell-off.

The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 157.93 points or 1 percent at 15,598.16, the Nasdaq is up 44.68 points or 1.1 percent at 4,056.23 and the S&P 500 is up 18.07 points or 1 percent at 1,769.71.

The strength on Wall Street comes as traders digest the latest batch of U.S. economic data, including a report from the Labor Department showing a bigger than expected drop in initial jobless claims in the week ended February 1st.

The report said initial jobless claims fell to 331,000, a decrease of 20,000 from the previous week's revised figure of 351,000. Economists had expected jobless claims to drop to 337,000.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, last week seems like an anomaly as the 331,000 print this week is about in line with the average in the first three weeks of January of 328,000."

A separate Labor Department report said labor productivity rose by 3.2 percent in the fourth quarter following a revised 3.6 percent increase in the third quarter. Economists had expected productivity to rise by about 2.6 percent.

At the same time, the report said unit labor costs dropped by 1.6 percent in the fourth quarter after falling by 2.0 percent in the third quarter. Costs had been expected to decrease by 0.7 percent.

Meanwhile, the Commerce Department also released a report showing that the U.S. trade deficit widened by more than expected in the month of December.

The Commerce Department said the trade deficit widened to $38.7 billion in December from a revised $34.6 billion in November. Economists had expected a deficit of $36.0 billion.

The wider than expected trade deficit came as the value of imports edged up by 0.3 percent, while the value of exports dropped by 1.8 percent.

Among individual stocks, shares of Disney (DIS) are moving notably higher after the entertainment giant reported better than expected first quarter earnings due in part to the strong performance by its animated hit film "Frozen."

Cloud services provider Akamai Technologies (AKAM) is also turning in a strong performance after reporting fourth quarter results that exceeded analyst estimates.

On the other hand, shares of Twitter (TWTR) have come under pressure after the social media giant reported an unexpected fourth quarter profit but on slower user growth.

Sector News

While most of the major sectors have moved to the upside on the day, significant strength remains visible among housing stocks. Reflecting the strength in the housing sector, the Philadelphia Housing Sector Index has surged up by 3.1 percent.

Vulcan Materials (VMC) has helped to lead the housing sector higher, with the construction materials producer jumping 10.2 percent after reporting strong fourth quarter earnings growth.

Considerable strength has also emerged among airline stocks, as reflected by the 2.3 percent gain being posted by the NYSE Arca Airline Index. The index is climbing further off the one-month closing low that it set on Monday.

Steel stocks are also turning in a strong performance on the day, driving the NYSE Arca Steel Index up by 2.4 percent. With the gain, the index continues to recover from Monday's five-month closing low.

Networking, semiconductor, retail, and oil stocks are also seeing notable strength amid broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, although Japan's Nikkei 225 Index bucked the uptrend and edged down by 0.2 percent. Hong Kong's Hang Seng Index advanced 0.7 percent and Australia's All Ordinaries Index jumped 1.2 percent.

The major European markets also showed notable moves to the upside on the day. While the German DAX Index surged up by 1.5 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index soared by 1.6 percent and 1.7 percent, respectively.

In the bond market, treasuries are moving moderately lower, pulling back further off their recent highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.5 basis points at 2.702 percent.