U.S. Stocks Regain Ground Amid Optimism About End Of Rate Hikes
Stocks have moved mostly higher in morning trading on Thursday, regaining ground following the sell-off seen late in the previous session. The major averages have all moved back to the upside, with the tech-heavy Nasdaq leading the advance.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Nasdaq is up 204.81 points or 1.8 percent at 11,874.76, the S&P 500 is up 42.31 points or 1.1 percent at 3,979.28 and the Dow is up 249.36 points or 0.8 percent at 32,279.47.
The strength on Wall Street comes as traders continue to react to yesterday’s monetary policy announcement by the Federal Reserve.
While some traders were initially disappointed the Fed decided to continue raising rates despite recent banking industry turmoil, indications the central bank is nearing the end of its tightening cycle have generated some buying interest.
The latest projections suggest the Fed plans just one more quarter-point rate hike this year, with CME Group’s FedWatch Tool currently showing a roughly 50-50 chance the increase will come in May.
Even if the Fed raises rates again at its next meeting, traders may take some comfort in knowing officials feel a range of 5.0 to 5.25 percent will be the so-called “terminal rate.”
In U.S. economic news, a report released by the Labor Department unexpectedly showed a slight decrease by first-time claims for U.S. unemployment benefits in the week ended March 18th.
The Labor Department said initial jobless claims slipped to 191,000, a decrease of 1,000 from the previous week’s unrevised level of 192,000. Economists had expected jobless claims to rise to 201,000.
The report said the less volatile four-week moving average also edged down to 196,250, a decrease of 250 from the previous week’s unrevised average of 196,500.
The Commerce Department also released a report showing new home sales in the U.S. increased from a significantly downwardly revised level in the month of February.
The report said new home sales climbed by 1.1 percent to an annual rate of 640,000 in February after jumping by 1.8 percent to a downwardly revised rate of 633,000 in January.
Economists had expected new home sales to pull back to an annual rate of 645,000 from the 670,000 originally reported for the previous month.
Sector News
Semiconductor stocks have moved sharply higher on the day, with the Philadelphia Semiconductor Index surging by 3.1 percent. The index is on pace to end the session at its best closing level in almost a year.
Considerable strength is also visible among gold stocks, as reflected by the 2.3 percent jump by the NYSE Arca Gold Bugs Index.
The strength in the gold sector comes as the price of gold for April delivery is spiking $35.60 or 1.8 percent to $1,985.20 an ounce.
Steel, software, computer hardware and housing stocks are also seeing significant strength, moving higher along with most of the other major sectors.
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 edged down by 0.2 percent, while China’s Shanghai Composite Index climbed by 0.6 percent.
Meanwhile, most European stocks have moved to the downside on the day. While the U.K.’s FTSE 100 Index has slid by 0.8 percent, the German DAX Index and the French CAC 40 Index are both just below the unchanged line.
In the bond market, treasuries are extending the strong upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.4 basis points at 3.466 percent.
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