Stocks Move Higher As Upbeat Data Offsets Rate Concerns - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Thursday after recovering from an early move to the downside. A batch of upbeat economic data helped to offset concerns about the outlook for interest rates.

The major averages all closed in positive territory, with the Dow and the S&P 500 nearly offsetting yesterday's losses. The Dow jumped 108.88 points or 0.7 percent to 16,331.05, the Nasdaq rose 11.68 points or 0.3 percent to 4,319.29 and the S&P 500 climbed 11.24 points or 0.6 percent to 1,872.01.

While concerns about the Federal Reserve raising interest rates sooner than anticipated generated initial selling pressure on Wall Street, traders reacted positively to the release of some U.S. economic data not long after the open.

The data included a report from the Conference Board showing a bigger than expected increased by its index of leading economic indicators.

The report said the leading economic index rose by 0.5 percent in February after edging up by 0.1 percent in January. Economists had expected the index to rise by 0.3 percent.

Ataman Ozyildirim, an economist at the Conference Board, said, "The U.S. LEI increased sharply in February, suggesting that any weather-related volatility will be short lived and the economy should continue to improve into the second half of the year."

A separate report from the Philadelphia Reserve also suggested a return to growth in March following weather-related weakness in February.

The Philly Fed said its diffusion index of current activity jumped to a positive 9.0 in March from a negative 6.3 in February. A positive reading indicates an increase in regional manufacturing activity.

Meanwhile, the National Association of Realtors released a report showing a modest drop in existing home sales in February. The drop matched economist estimates.

The Labor Department also released a report before the start of trading showing a modest rebound in initial jobless claims in the week ended March 15th.

Sector News

Banking stocks helped to lead the markets higher ahead of the release of the Fed's stress test results, with the Dow Jones Banks Index surging up by 2.4 percent. The gain extended a recent upward trend by the index, which reached its best closing level in over five years.

Zions Bancorp (ZION), JP Morgan (JPM), and BNY Mellon (BK) turned in some of the banking sector's best performances on the day.

Considerable strength was also visible among telecom stocks, as reflected by the 2 percent gain posted by the NYSE Arca Telecom Index. With the gain, the index reached a six-year closing high.

Semiconductor stocks also turned in a strong performance, driving the Philadelphia Semiconductor Index up by 1.9 percent to a fourteen year closing high.

Brokerage, software, and electronic storage stocks also moved notably higher on the day, while housing stocks came under pressure.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw significant weakness during trading on Thursday. Japan's Nikkei 225 Index slumped by 1.7 percent, while Hong Kong's Hang Seng Index tumbled by 1.8 percent.

Meanwhile, the European markets turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index rose by 0.5 percent and the German DAX Index edged up by 0.2 percent.

In the bond market, treasuries showed a lack of direction throughout the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ticked up by less than a basis point to 2.775 percent.

Looking Ahead

Following today's slew of U.S. economic data, there are no major reports scheduled to be released on Friday, potentially leading to subdued trading.

Nonetheless, shares of Nike (NKE) may be in focus following the release of quarterly results from the athletic apparel giant after the close of today's trading.