Stocks Moving Mostly Higher After Initial Volatility - U.S. Commentary

(RTTNews) - After seeing initial volatility, stocks have moved mostly higher over the course of early trading on Thursday. The major averages have all moved to the upside, adding to the gains posted in the three previous sessions.

Currently, the major averages are posting moderate gains. The Dow is up 71.54 points or 0.4 percent at 17,625.82, the Nasdaq is up 22.05 points or 0.5 percent at 4,689.47 and the S&P 500 is up 10.87 points or 0.5 percent at 2,042.99.

The strength that has emerged on Wall Street reflects a positive reaction to European Central Bank President Mario Draghi's announcement of an expanded asset purchase program.

Draghi said the ECB will purchase 60 billion euros per month worth of securities, including investment grade sovereign bonds, beginning in March.

The expanded asset purchase program is currently scheduled to last until September of 2016, although Draghi said purchases would continue until there is a sustained improvement in inflation.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "The action in stocks is just Pavlovian to any form of central bank accommodation and today is no different."

"The transmission though of these newly printed euros into actual stock purchases is specious and thus buying stocks on ECB QE news is more superstition than based on substance in the U.S.," he added.

The news out of Europe has largely overshadowed a recent report from the Labor Department showing a modest drop in first-time claims for U.S. unemployment benefits in the week ended January 17th.

The report said initial jobless claims fell to 307,000, a decrease of 10,000 from the previous week's revised level of 317,000. Economists had expected jobless claims to slide to 300,000.

Airline stocks have shown a particularly strong move to the upside in early trading, driving the NYSE Arca Airline Index up by 3 percent. With the gain, the index has reached its best intraday level in almost thirteen years.

Southwest Airlines (LUV) and United Continental (UAL) have helped to lead the sector higher after reporting their quarterly results.

Other transportation stocks are also moving notably higher along with banking and computer hardware stocks, while some weakness is visible among networking stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has surged up by 1.3 percent, the U.K's FTSE 100 Index and the German DAX Index are both climbing by 0.9 percent.

In the bond market, treasuries have moved modestly lower, extending the downward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 1.872 percent.