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Optimism About Trade Contributes To Strength On Wall Street - U.S. Commentary

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Following the lackluster performance seen in the previous session, stocks moved mostly higher during trading on Thursday. The major averages all climbed into positive territory after ending Wednesday's trading mixed.

The Dow climbed 147.07 points or 0.6 percent to 26,145.99, the Nasdaq advanced 59.48 points or 0.8 percent to 8,013.71 and the S&P 500 rose 15.26 points or 0.5 percent to 2,904.18.

The strength on Wall Street partly reflected optimism about trade following recent reports the U.S. is proposing a new round of trade talks with China in the near future.

U.S. Treasury Secretary Steven Mnuchin has reportedly sent an invitation for talks to senior Chinese officials, proposing a meeting in the next few weeks.

Traders also reacted positively to a report from the Labor Department showing consumer prices rose by less than expected in the month of August.

The Labor Department said its consumer price index rose by 0.2 percent in August, matching the increase seen in July. Economists had expected prices to climb by 0.3 percent.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in August after rising by 0.2 percent for three straight months. Core prices had been expected to show another 0.2 percent increase.

The report also said the annual rate of consumer price growth slowed to 2.7 percent in August from 2.9 percent in July.

Core consumer prices were up by 2.2 percent year-over-year in August compared to the 2.4 percent increase in the previous month.

"There is no reason to suspect that the weaker increase in consumer prices in August is the start of another dip like we saw in early 2017," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, "With labor market conditions tight, wage growth accelerating and input prices being pushed up by capacity constraints and recently imposed tariffs, there is plenty of upward pressure on prices."

A separate report from the Labor Department unexpectedly showed a slight drop in initial jobless claims in the week ended September 8th.

The report said initial jobless claims dipped to 204,000, a decrease of 1,000 from the previous week's revised level of 205,000.

Economists had expected jobless claims to rise to 210,000 from the 203,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level since hitting 202,000 in December of 1969.

Telecom stocks showed a significant move to the upside on the day, driving the NYSE Arca Telecom Index up by 2.6 percent. With the jump, the index reached its best closing level in four years.

Considerable strength was also visible among semiconductor stocks, as reflected by the 1.2 percent gain posted by the Philadelphia Semiconductor Index.

Healthcare and utilities stocks also turned in strong performances on the day, while tobacco and banking stocks moved to the downside.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index soared by 2.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose by 0.2 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index fell by 0.4 percent.

In the bond market, treasuries showed a lack of direction before ending the session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, closed unchanged at 2.963 percent.

Looking ahead, trading on Friday may be impacted by reaction to key economic data, including reports on retail sales, import and export prices, industrial production and consumer sentiment.

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