U.S. Stocks Regain Ground Following Recent Weakness

Stocks moved mostly higher during trading on Thursday, regaining some ground following the sell-off seen earlier in the week. The major averages have all moved to the upside, with the tech-heavy Nasdaq leading the way higher.

The major averages finished the session off their best levels of the day but still firmly positive. The Nasdaq jumped 123.45 points or 1.1 percent to 11,082.00, the S&P 500 advanced 29.59 points or 0.8 percent to 3,963.51 and the Dow climbed 183.56 points or 0.6 percent to 33,781.48.

The strength on Wall Street came as traders picked up stocks at somewhat reduced levels following the sell-off seen to start the week, which reflected concerns about the outlook for interest rates and the economy.

The advance by the S&P 500 came after the index closed lower for five consecutive sessions, pulling back well off the more than two-month closing high set last Wednesday.

Meanwhile, traders continued to look ahead to Friday’s release of the Labor Department’s report on producer price inflation in November.

Economists expect producer prices to inch up by 0.1 percent in November after rising by 0.2 percent in October, while the annual rate of growth is expected to slow to 7.4 percent from 8.0 percent.

The University of Michigan is also due to release its preliminary report on consumer sentiment in the month of December on Friday. The report includes readings on inflation expectations that could impact the outlook for interest rates.

Traders will be looking for signs of a slowdown in inflation as well as reduction in inflation expectations amid concerns the Federal Reserve will be need to push the economy into a prolonged recession in order to bring inflation down close to its 2 percent target.

The Labor Department released a report this morning showing first-time claims for U.S. unemployment benefits edged slightly higher in the week ended December 3rd.

The report said initial jobless claims crept up to 230,000, an increase of 4,000 from the previous week’s revised level of 226,000.

Economists had expected jobless claims to inch up to 230,000 from the 225,000 originally reported for the previous week.

Sector News

Networking stocks showed a substantial move to the upside on the day, driving the NYSE Arca Networking Index up by 3.9 percent.

Ciena (CIEN) helped lead the sector higher, spiking by 20 percent after reporting better than expected fiscal fourth quarter results and forecasting “outsized” revenue growth in 2023.

Significant strength was also visible among semiconductor stocks, as reflected by the 2.7 percent surge by the Philadelphia Semiconductor Index.

Tobacco stocks also turned in a strong performance on the day, resulting in a 2.1 percent jump by the NYSE Arca Tobacco Index.

Computer hardware and biotechnology stocks also moved notably higher, while natural gas and airline stocks came under pressure over the course of the session.

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 fell by 0.4 percent, while Hong Kong’s Hang Seng Index spiked by 3.4 percent.

Meanwhile, European stocks moved modestly lower on the day. While the German DAX Index closed nearly unchanged, the French CAC 40 Index and the U.K.’s FTSE 100 Index both edged down by 0.2 percent.

In the bond market, treasuries gave back ground after moving sharply higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 8.3 basis points to 3.491 percent.

Looking Ahead

Trading on Friday is likely to be driven by reaction to the report on producer price inflation as well as the readings on inflation expectations.

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