U.S. Seeing Further Upside Amid Growing Confidence In Banking Stabilization

(RTTNews) - Stocks have moved mostly higher in morning trading on Thursday, adding to the strong gains posted in the previous session. With the extended upward move, the tech-heavy Nasdaq has reached its best intraday level in over a month.

Currently, the major averages are hovering near their best levels of the day. The Nasdaq is up 104.36 points or 0.9 percent at 12,030.60, the S&P 500 is up 26.21 points or 0.7 percent at 4,054.02 and the Dow is up 128.61 points or 0.4 percent at 32,846.21.

The extended advance on Wall Street comes as concerns about turmoil in the banking sector continue to ease after sparking substantial volatility on Wall Street in recent weeks.

A lack of major negative developments regarding the banking industry in recent days has led to confidence the situation has stabilized.

Meanwhile, traders continue so look ahead to tomorrow's report on personal income and spending, which includes a reading on inflation said to be preferred by the Federal Reserve and could have an impact on the outlook for interest rates.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

CME Group's FedWatch Tool currently indicates a 52.1 percent chance the Fed will leave rates unchanged at its next meeting in early May and a 47.9 percent chance of a 25 basis point increase.

On the economic front, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended March 25th.

The report said initial jobless claims rose to 198,000, an increase of 7,000 from the previous week's unrevised level of 191,000. Economists had expected jobless claims to inch up to 196,000.

A separate report released by the Commerce Department showed the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2022.

The report said real gross domestic product shot up by 2.6 percent in the fourth quarter compared to the previously reported 2.7 percent jump. Economists had expected the pace of growth to be unrevised.

The Commerce Department said the slower than previously estimated growth reflected downward revisions to exports and consumer spending.

Sector News

Airline stocks have shown a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 2.8 percent.

Significant strength is also visible among semiconductor stocks, as reflected by the 1.9 percent gain being posted by the Philadelphia Semiconductor Index. The index has reached an eleven-month intraday high.

Tobacco stocks are also turning in a strong performance on the day, resulting in a 1.9 percent advance by the NYSE Arca Tobacco Index.

Philip Morris (PM) has helped lead the sector higher, jumping by 3.0 percent after JPMorgan upgraded its rating on the company's stock to Overweight from Neutral.

Steel, networking and computer hardware stocks are also seeing 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 moved mostly higher on Thursday, although Japan's Nikkei 225 Index bucked the uptrend and fell by 0.4 percent. China's Shanghai Composite Index climbed by 0.7 percent, while South Korea's Kospi rose by 0.4 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index is up by 1.2 percent, the French CAC 40 Index is up by 1.0 percent and the U.K.'s FTSE 100 Index is up by 0.7 percent.

In the bond market, treasuries continue to show a lack of direction after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 3.562 percent.