Strength On Wall Street Lifts S&P 500 To Record Closing High - U.S. Commentary

(RTTNews) - While buying interest was somewhat subdued, stocks moved mostly higher over the course of the trading day on Thursday. With the upward move on the day, the S&P 500 managed to end the session at a new record closing high.

The major averages ended the day firmly in positive territory, near their best levels of the session. The Dow rose 74.24 points or 0.5 percent to 16,272.65, the Nasdaq advanced 26.87 points or 0.6 percent to 4,318.93 and the S&P 500 climbed 9.13 points or 0.5 percent to 1,854.29.

The strength on Wall Street came as traders digested Federal Reserve Chair Janet Yellen's testimony before the Senate Banking Committee.

While the tone of Yellen's testimony was little changed from her remarks before the House Financial Services Committee earlier this month, she acknowledged the economic impact of the severe winter weather.

Yellen said it was too soon to know how much the weather has played a role in this winter's economic lull but said the Fed will consider the issue at its March meeting.

On the economic front, the Commerce Department released a report before the start of trading showing a drop in durable goods orders in the month of January.

The report said durable goods orders fell by 1.0 percent in January after tumbling by a revised 5.3 percent in December. Economists had expected orders to drop by about 1.6 percent.

However, excluding a notable decrease in orders for transportation equipment, durable goods orders actually rose by 1.1 percent in January compared to a 1.9 percent drop in December.

The increase in orders excluding transportation came as a surprise to economists, who had expected a modest decrease of about 0.4 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Overall, there is some evidence that the growth rate of equipment investment is strengthening but, as with much of the other activity and employment data, we won't know for sure until the weather improves."

Meanwhile, the Labor Department released a separate report showing that initial jobless claims came in above economist estimates in the week ended February 22nd.

The report said initial jobless claims rose to 348,000, an increase of 14,000 from the previous week's revised figure of 334,000. Economists had been expecting jobless claims to edge down to 335,000 from the 336,000 originally reported for the previous week.

Sector News

Telecom stocks saw considerable strength on the day, resulting in a 1.5 percent gain by the NYSE Arca North American Telecom Index. The gain by the index came after it closed lower for four consecutive sessions.

Telephone & Data Systems (TDS) and Sprint (S) turned in two of the telecom sector's best performances, advancing by 4.3 percent and 3.1 percent, respectively.

Significant strength was also visible among steel stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Steel Index.

Computer hardware, software, and tobacco stocks also turned in strong performances on the day, while most of the other major sectors showed more modest moves move.

Other Markets

In overseas trading, stock markets in the Asia-Pacific region once again turned in a mixed performance on Thursday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index surged up by 1.7 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the German DAX Index dropped by 0.8 percent and the French CAC 40 Index closed just below the unchanged line.

In the bond market, treasuries moved moderately higher, extending a recent upward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.642 percent.

Looking Ahead

Trading on Friday may be impacted by the release of a batch of U.S. economic data, including reports on fourth quarter GDP, pending home sales, and Chicago-area business activity.