While buying interest has remained relatively subdued, stocks have moved modestly higher over the course of the trading day on Thursday. Trading activity remains light ahead of the announcement of the Federal Reserve's latest monetary policy decision.
The major averages are currently posting modest gains, adding to the gains posted in the two previous sessions. The Dow is up 23.04 points or 0.2 percent at 13,356.39, the Nasdaq is up 4.99 points or 0.2 percent at 3,119.30 and the S&P 500 is up 1.47 points or 0.1 percent at 1,438.03.
The modest strength that has emerged on Wall Street may reflect optimism about what the Fed will say in its monetary policy statement, which is due to be released at about 12:30 pm ET.
Many analysts expect the central bank to announce another round of quantitative easing as part of an effort to stimulate the sluggish economy, although others have predicted that the Fed will only extend its pledge to keep interest rates at exceptionally low levels.
A lack of additional stimulus could lead to a sell-off on Wall Street, as stimulus hopes have helped to push the markets higher in recent weeks. Even if the Fed announces additional stimulus, stocks could come under pressure as traders sell on the news after buying on the rumor.
With the focus on the Fed, traders have largely shrugged off a report from the Labor Department showing a bigger than expected increase in weekly jobless claims.
The report showed that initial jobless claims rose to 382,000 in the week ended September 8th from the previous week's revised figure of 367,000. Economists had been expecting jobless claims to edge up to 370,000 from the 365,000 originally reported for the previous week.
Labor Department officials noted that the increase in jobless claims was partly due to the impact of Hurricane Isaac, as major storms can often delay unemployment filings.
A separate report from the Labor Department showed that a substantial rebound in energy prices contributed to a bigger than expected increase in producer prices in the month of August.
The Labor Department said its producer price index surged up by 1.7 percent in August following a 0.3 percent increase in July. Economists had expected the index to increase by 1.4 percent.
Excluding the jump in energy prices as well as a notable increase in food prices, the core producer price index edged up by 0.2 percent in August after rising by 0.4 percent in July. The modest increase in core prices came in line with economist estimates.
Most of the major sectors are showing only modest moves on the day, contributing to the relatively lackluster performance by the broader markets.
Nonetheless, considerable weakness has emerged among housing stocks, as reflected by the 1.1 percent loss being posted by the Philadelphia Housing Sector Index. The loss by the index comes after it ended the previous session at its best closing level in well over four years.
Brokerage and oil service stocks are seeing more moderate weakness, while modest strength is visible among telecom, utilities, and commercial real estate stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index rose by 0.4 percent, Hong Kong's Hang Seng Index edged down by 0.1 percent.
The major European markets also ended the day mixed. The U.K.'s FTSE 100 Index rose by 0.7 percent, while the German DAX Index fell by 0.5 percent and the French CAC 40 Index tumbled by 1.2 percent.
In the bond market, treasuries have moved to the upside amid optimism about the possibility of further quantitative easing. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.9 basis points at 1.726 percent.
by RTT Staff Writer
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