Stocks Pull Back Off Highs But Still Snap 5-Day Losing Streak - U.S. Commentary

(RTTNews) - After showing a strong move to the upside in early trading on Thursday, stocks gave back some ground as the day progressed but still managed to close mostly higher. The gains on the day partly offset the recent pullback by the markets.

The major averages moved to the upside going into the close but remained well off their best levels. The Dow rose 55.04 points or 0.4 percent to 15,328.30, the Nasdaq advanced 26.33 points or 0.7 percent to 3,787.43 and the S&P 500 climbed 5.90 points or 0.4 percent to 1,698.67.

The early strength on Wall Street was partly due to bargain hunting following the recent weakness in the markets, with the Dow and the S&P 500 rebounding after closing lower for five straight days.

Positive sentiment was also generated by a report from the Labor Department showing an unexpected drop in initial jobless claims in the week ended September 21st.

The report said initial jobless claims fell to 305,000, a decrease of 5,000 from the previous week's revised figure of 310,000. Economists had had expected jobless claims to climb to 325,000.

While the jobless claims data in recent weeks was impacted by technical issues in two states, the Labor Department said the latest report is clean.

However, the early buying interest was partly offset by a report from the National Association of Realtors showing a bigger than expected drop in pending home sales in the month of August.

NAR said its pending home sales index dropped by 1.6 percent in August after falling by 1.4 percent in July. Economists had been expecting the index to decrease by about 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The subsequent pullback by the markets reflected concerns about the ongoing budget debates in Washington, where lawmakers continue to wrangle over legislation to keep the government running past next Monday.

Sector News

Many of the major sectors ended the day showing only modest moves, although considerable strength remained visible among biotechnology stocks. The NYSE Arca Biotechnology Index jumped by 2 percent after closing lower for five consecutive sessions.

Sequenom (SQNM) and Regeneron Pharmaceuticals (REGN) turned in two of the biotech sector's best performances, advancing by 4.5 percent and 4.6 percent, respectively.

Internet, retail, and airline stocks were also showing some at the close, although buying interest waned from earlier in the session.

Meanwhile, gold stocks came under significant selling pressure, moving lower along with the price of the precious metal. With gold for December delivery falling $12.10 to $1,324.10 an ounce, the NYSE Arca Gold Bugs Index dropped by 1.4 percent.

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 surged up by 1.2 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

The major European markets also turned mixed on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index dipped by 0.2 percent and the German DAX Index closed just below the unchanged line.

In the bond market, treasuries gave back some ground after trending higher over the past two weeks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.9 basis points to 2.643 percent.

Looking Ahead

Economic data may attract some attention on Friday, with traders likely to keep an eye on the release of reports on personal income and spending and consumer sentiment.

On the earnings front, athletic apparel giant Nike (NKE) is releasing its quarterly results after the close of trading, marking its first earnings report as a Dow component.