With technology stocks adding to the substantial gains posted in the previous session, notable strength was visible on Wall Street on Thursday. Disappointing economic data limited the upside for the markets, but stocks still extended their recent upward move.
The major averages all ended the day in positive territory, although the Nasdaq outperformed its counterparts. While the Nasdaq advanced 23.30 points or 0.8 percent to 2,965.90, the Dow rose 34.66 points or 0.3 percent to 12,943.36 and the S&P 500 climbed 3.73 points or 0.3 percent to 1,376.51.
Tech stocks helped to lead the markets higher once again, as traders reacted positively to the latest batch of earnings news out of the sector.
IBM Corp. (IBM) saw notable strength on the day, with the tech giant advancing by 3.8 percent after reporting better than expected second quarter earnings growth. While the company's revenues fell short of estimates, IBM also raised its full-year earnings guidance.
Online auctioneer eBay (EBAY) also posted a strong gain after reporting better than expected second quarter results. Shares of eBay surged up by 8.6 percent.
Nokia (NOK) and Qualcomm (QCOM) also saw significant strength on the day following the release of their quarterly results.
Nonetheless, buying interest remained somewhat subdued following the release of some disappointing economic data, including a report from the Labor Department showing a bigger than expected increase in weekly jobless claims.
The Labor Department said jobless claims jumped to 386,000 in the week ended July 14th from the previous week's revised figure of 352,000. Economists had expected jobless claims to climb to 365,000 from the 350,000 originally reported for the previous week.
A separate report from the National Association of Realtors showed an unexpected drop in existing home sales in the month of June.
NAR said existing home sales fell 5.4 percent to an annual rate of 4.37 million in June from an upwardly revised 4.62 million in May. The drop surprised economists, who had expected existing home sales to climb to 4.65 million from the 4.55 million originally reported for the previous month.
The Philadelphia Federal Reserve also released a report showing continued weakness in regional manufacturing activity, while a Conference Board report showed a bigger than expected drop by its leading economic indicators index.
Additionally, shares of Morgan Stanley (MS) came under pressure after the financial giant reported weaker than expected second quarter earnings amid a notable drop in revenues. Morgan Stanley fell by 5.3 percent on the day.
Within the tech sector, electronic storage stocks posted particularly strong gains, driving the NYSE Arca Disk Drive Index up by 4.3 percent. The gain lifted the index further off the nine-month closing low that it set on Monday.
Quantum (QTM) helped to lead the storage sector higher, with the data management company surging up by 9.8 percent after ending the previous session at its worst closing level in over two years.
Semiconductor and networking stocks also posted notable gains, adding to the standout gains posted in the previous session. The Philadelphia Semiconductor Index and the NYSE Arca Networking Index advanced by 2 percent and 1.8 percent, respectively.
Outside of the tech sector, considerable strength was also visible among railroad stock, as reflected by the 2.4 percent gain posted by the Dow Jones Railroads Index. Union Pacific (UNP) rose by 3.5 percent after reporting better than expected second quarter earnings.
While gold stocks also saw significant strength amid an increase by the price of the precious metal, airline stocks moved sharply lower over the course of the trading day. The NYSE Arca Airline Index fell by 2 percent to a one-month closing low.
Healthcare provider, brokerage, and commercial real estate stocks also moved to the downside on the day, helping to limit the upside for the broader markets.
In overseas trading, stock markets across the Asia-Pacific region moved notably higher on Thursday, benefiting from the overnight strength on Wall Street. Japan's Nikkei 225 Index advanced by 0.8 percent, while Hong Kong's Hang Seng Index surged up by 1.7 percent.
The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.5 percent, the French CAC 40 Index advanced by 0.9 percent and the German DAX Index jumped by 1.1 percent.
In the bond market, treasuries moved moderately lower amid the continued strength on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.6 basis points to 1.515.
Amid the lack of any major U.S. economic reports, earnings news is likely to remain in focus during trading on Friday.
Tech giants Microsoft (MSFT), Google (GOOG), and Advanced Micro Devices (AMD) are among the companies releasing their quarterly results after the close of today's trading.
Additionally, diversified conglomerate General Electric (GE) is due to release its second quarter results before the start of trading on Friday.
by RTT Staff Writer
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