Stocks Seeing Further Upside In Mid-Day Trading - U.S. Commentary

(RTTNews) - Following the sell-off seen over the past several sessions, stocks have shown a strong move to the upside during trading on Thursday. The major averages have climbed firmly into positive territory after fluctuating early in the session.

In recent trading, the major averages have seen some further upside, reaching new highs for the session. The Dow is up 252.09 points or 1.6 percent at 16,018.83, the Nasdaq is up 56.87 points or 1.3 percent at 4,528.56 and the S&P 500 is up 27.88 points or 1.5 percent at 1,887.21.

The strength on Wall Street is partly due to bargain hunting, as traders pick up stocks at reduced levels following the recent weakness.

The gains by the major averages come after they ended the previous session at their lowest closing levels in over a year.

Traders are also reacting to the latest monetary policy announcement from the European Central Bank, which left interest rates unchanged.

In his subsequent press conference, ECB President Mario Draghi noted downside risks have increased and said the bank would review and possibly reconsider its monetary policy stance at the next meeting in early March.

On the U.S. economic front, the Labor Department released a report before the start of trading showing an unexpected increase in initial jobless claims in the week ended January 16th.

The report said initial jobless claims climbed to 293,000, an increase of 10,000 from the previous week's revised level of 283,000.

The increase came as a surprise to economists, who had expected jobless claims to drop to 275,000 from the 284,000 originally reported for the previous week.

With the unexpected increase, jobless claims rose to their highest level since reaching 296,000 in the week ended July 4th.

A separate report from the Federal Reserve Bank of Philadelphia showed that manufacturing conditions in the Philadelphia region contracted modestly in January.

The Philly Fed said its diffusion index for current activity increased to a negative 3.5 in January from a negative 10.2 in December, although a negative reading indicates a contraction in regional manufacturing activity.

Sector News

Energy stocks are seeing considerable strength in mid-day trading, benefiting from a notable increase by the price of crude oil. Crude for March delivery is currently climbing $1.17 to $29.52 a barrel.

The increase by the price of crude oil comes following the release of a report from the Energy Information Administration showing an unexpected decrease in distillate fuel inventories.

Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index has surged up by 9.6 percent, while the Philadelphia Oil Service Index has jumped by 5.6 percent and the NYSE Arca Oil & Gas Index has advanced by 3.3 percent.

Significant strength is also visible among semiconductor stocks, as reflected by the 2.7 percent gain being posted by the Philadelphia Semiconductor Index. SunEdison (SUNE), Xilinx (XLNX), and Cyprus Semiconductor (CY) are posting standout gains.

Telecom, steel, and housing stocks are also seeing notable strength on the day, while railroad and gold stocks are bucking the uptrend.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region saw considerable weakness during trading on Thursday. Japan's Nikkei 225 Index plunged by 2.4 percent, while Hong Kong's Hang Seng Index slumped by 1.8 percent.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index shot up by 1.8 percent, the German DAX Index and the French CAC 40 Index jumped y 1.9 percent and 2 percent, respectively.

In the bond market, treasuries have moved moderately lower amid the rally on Wall Street As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.1 basis points at 2.005 percent.