U.S. Stocks Move Notably Higher Amid Progress On Debt Ceiling Bill

After showing a lack of direction early in the session, stocks have moved notably higher over the course of the trading day on Thursday. The major averages have all moved to the upside, with the Nasdaq and S&P 500 on pace to end the session at new nine-month closing highs.

Currently, the major averages are hovering near their best levels of the day. The Nasdaq is up 151.74 points or 1.2 percent at 13,087.03, the S&P 500 is up 38.98 points or 0.9 percent at 4,218.81 and the Dow is up 210.21 points or 0.6 percent at 33,118.48.

The strength that has emerged on Wall Street comes after the House voted Wednesday night to approve the bill raising the U.S. debt ceiling.

The House voted 314 to 117 in favor of the Fiscal Responsibility Act, with the legislation attracting support from both Democrats and Republicans.

The legislation now heads to the Senate, where Majority Leader Chuck Schumer, D-N.Y., said he hopes lawmakers can work quickly and bring the bill to the president’s desk “as soon as possible.”

Schumer said the Senate would remain in session until the bill is passed and warned lawmakers would be risking a default by trying to amend the legislation and send it back to the House.

On the U.S. economic front, payroll processor ADP released a report showing private sector employment in the U.S. jumped by much more than expected in the month of May.

The report said private sector employment shot up by 278,000 jobs in May after surging by a revised 291,000 jobs in April.

Economists had expected private sector employment to increase by 170,000 jobs compared to the spike of 296,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department released a report showing a slight increase in first-time claims for U.S. unemployment benefits in the week ended May 27th.

The report said initial jobless claims crept up to 232,000, an increase of 2,000 from the previous week’s revised level of 230,000.

Economists had expected jobless claims to rise to 235,000 from the 229,000 originally reported for the previous week.

The Institute for Supply Management also released a report showing U.S. manufacturing activity contracted at a slightly faster rate in the month of May.

The ISM said its manufacturing PMI slipped to 46.9 in May from 47.1 in April, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.0.

Sector News

Oil service stocks have moved sharply higher over the course of the session, resulting in a 4.4 percent spike by the Philadelphia Oil Service Index. The index is bouncing off its lowest closing level in over seven months.

The rebound by oil service stocks comes amid a surge by the price of crude oil, with crude for July delivery jumping $2.75 to $70.84 a barrel.

Substantial strength is also visible among computer hardware stocks, as reflected by the 4.1 percent gain being posted by the NYSE Arca Computer Hardware Index.

Pure Storage (PSTG) has helped lead the sector higher after the data storage company reported better than expected fiscal first quarter earnings and provided upbeat full-year guidance.

Gold stocks have also shown a strong move to the upside amid an increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.3 percent.

Tobacco, steel and banking stocks are also seeing considerable strength on the day, while utilities stocks are among the few groups bucking the uptrend.

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 advanced by 0.8 percent, while Hong Kong’s Hang Seng Index edged down by 0.1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index jumped by 1.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index both climbed by 0.6 percent.

In the bond market, treasuries have pulled back well off their best levels but continue to see modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 3.622 percent.

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