Upbeat Earnings News Pushes Stocks Mostly Higher - U.S. Commentary

(RTTNews) - After moving modestly higher in early trading on Thursday, stocks saw some further upside over the course of the trading day. The gains on the day largely offset the pullback seen in the previous session, with the Dow reaching its best closing level in a month.

The major averages pulled back off their best levels going into the close but still ended the day firmly positive. The Dow jumped 95.88 points or 0.6 percent to 15,509.21, the Nasdaq climbed 21.89 points or 0.6 percent to 3,928.96 and the S&P 500 rose 5.69 points or 0.3 percent to 1,752.07.

The strength on Wall Street came on the heels of the release of upbeat earnings news from big-name companies such as Ford (F) and 3M (MMM).

Shares of Ford advanced by 1.4 percent after the auto giant reported better than expected third quarter results and raised its full-year guidance.

Diversified manufacturer 3M posted a more modest gain after reporting third quarter earnings and revenues that exceeded analyst estimates.

Buying interest was also generated by the release of a report showing that Chinese manufacturing growth hit a seven-month high in October.

According to the results of a survey conducted by HSBC and Markit Economics, the index of Chinese manufacturing activity rose to 50.9 in October from 50.2 in September, coming in above economist estimates.

Meanwhile, the Labor Department released a report showing that initial jobless claims fell by less than expected in the week ended October 19th, although the data continued to be distorted.

The report said initial jobless claims dropped to 350,000, a decrease of 12,000 from the previous week's revised figure of 362,000. Economists had expected claims to fall to 340,000 from the 358,000 originally reported for the previous week.

The Commerce Department released a separate report showing that the U.S. trade deficit widened slightly in the month of August.

Sector News

After ending the previous session sharply lower, gold stocks showed a substantial move back to the upside. The NYSE Arca Gold Bugs Index surged up by 4.1 percent, more than offsetting yesterday's loss to reach its best closing level in a month.

The strength among gold stocks came amid a notable increase by the price of the precious metal, with gold for December delivery climbing $16.30 to $1,350.30 an ounce.

Housing stocks also saw significant strength on the day, driving the Philadelphia Housing Sector Index up by 2 percent. PulteGroup (PHM) helped to lead the sector higher after reporting better than expected third quarter results.

Significant strength was also visible among airline stocks, as reflected by the 1.8 percent gain posted by the NYSE Arca Airline Index. US Airways (LCC) posted a standout gain, jumping 5.9 percent to a nearly six-year high.

Biotechnology, semiconductor, and retail stocks also saw strength on the day, while weakness among networking and oil service stocks helped limit the upside for the markets.

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 rose by 0.4 percent, while Hong Kong's Hang Seng Index ended the day down by 0.7 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index climbed by 0.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index advanced by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries gave back some ground after moving sharply higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.7 basis points to 2.522 percent.

Looking Ahead

Earnings news is likely to remain in focus on Friday, as software giant Microsoft (MSFT) is among the companies releasing their quarterly results after the close of today's trading.

Procter & Gamble (PG) and UPS (UPS) are also among the companies due to report their results before the start of trading on Friday.

Economic data may also attract some attention, with reports on durable goods orders, consumer sentiment, and wholesale inventories all scheduled to be released.