Dow Up Nearly 400 Points On Trade Talk News, Walmart Earnings - U.S. Commentary

(RTTNews) - After coming under pressure in the previous session, stocks moved mostly higher during the trading day on Thursday. The major averages all moved to the upside, with the Dow posting a particularly strong gain on the day.

While stocks gave back some ground late in the trading day, the major averages managed to remain positive. The Dow spiked 396.32 points or 1.6 percent to 25,558.73, the Nasdaq rose 32.41 points or 0.4 percent to 7,806.52 and the S&P 500 climbed 22.32 points or 0.8 percent to 2,840.69.

The higher close on Wall Street came following news China has accepted an invitation from the U.S. for a new round of trade talks to be held in late August.

China's Ministry of Commerce said that a Chinese delegation led by Vice Commerce Minister Wang Shouwen will travel to the U.S. for trade talks to be held with U.S. Under Secretary of Treasury for International Affairs David Malpass.

In an interview with CNBC, White House economic advisor Larry Kudlow confirmed the U.S. and China will resume trade talks later this month.

A positive reaction to earnings news from Walmart (WMT) also contributed to the strength on Wall Street, with the retail giant jumping by 9.3 percent.

The advance by Walmart came after the company reported better than expected second quarter results and raised its full-year guidance.

On the U.S. economic front, the Labor Department released a report showing first-time claims for unemployment benefits unexpectedly edged lower in the week ended August 11th.

The report said initial jobless claims dipped to 212,000, a decrease of 2,000 from the previous week's revised level of 214,000.

Economists had expected jobless claims to inch up to 215,000 from the 213,000 originally reported for the previous week.

Meanwhile, a separate report from the Commerce Department showed new residential construction rebounded by much less than expected in the month of July.

The report said housing starts rose by 0.9 percent to an annual rate of 1.168 million in July after plunging by 12.9 percent to a revised rate of 1.158 million in June.

Economists had expected housing starts to soar by 7.4 percent to an annual rate of 1.260 million from the 1.173 million originally reported for the previous month.

The Commerce Department also said building permits climbed by 1.5 percent to an annual rate of 1.311 million in July after dipping by 0.7 percent to a revised rate of 1.292 million in June.

Building permits, an indicator of future housing demand, had been expected to jump by 2.9 percent to a rate of 1.310 million from the 1.273 million originally reported for the previous month.

Sector News

Financial stocks moved significantly higher over the course of the trading session, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index climbing by 1.4 percent and 1.2 percent, respectively.

Utilities, pharmaceutical telecom and biotechnology stocks also saw notable strength, although buying interest waned late in the trading day.

On the other hand, gold stocks extended their recent sell-off, dragging the NYSE Arca Gold Bugs Index down by 3 percent to its lowest closing level since early 2016.

The continued weakness in the gold sector came as the price of gold for December delivery dipped $1 to $1,184 an ounce and saw further downside in electronic trading.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region climbed off their worst levels but still closed mostly lower on Thursday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index dropped by 0.8 percent.

Meanwhile, the major European markets moved to the upside on the day. While the German DAX Index climbed by 0.6 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.8 percent.

In the bond market, treasuries gave back ground following the strong upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.9 basis points to 2.871 percent.

Looking Ahead

Following the slew of economic data released over the past two days, trading on Friday may be impacted by reaction to reports on consumer sentiment and leading economic indicators.

On the earnings front, Applied Materials (AMAT), Nordstrom (JWN), and Nvidia (NVDA) are among the companies releasing their quarterly results after the close of today's trading.

Farm equipment maker Deere & Co. (DE) is also due to release its fiscal third quarter results before the start of trading on Friday.