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Stocks Showing Notable Move Back To The Upside - U.S. Commentary

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Stocks have shown a notable move to the upside in morning trading on Thursday, rebound following the weakness seen in the previous session. The tech-heavy Nasdaq is more than offsetting the loss posted on Wednesday.

The major averages have pulled back off their best levels in recent trading but remain firmly positive. The Dow is up 150.43 points or 0.6 percent at 24,850.88, the Nasdaq is up 62.99 points or 0.8 percent at 7,779.60 and the S&P 500 is up 14.35 points or 0.5 percent at 2,788.37.

Easing trade concerns have contributed to the rebound on Wall Street after news of U.S. threats of a new 10 percent tariff on $200 billion worth of Chinese imports contributed to the weakness on Wednesday.

China vowed to take countermeasures in response to the new tariffs, although the markets have responded positively to the lack of the announcement of specific retaliation by the Chinese.

Traders also seem optimistic the continued tariff threats will eventually bring the U.S. and China to the table for talks that could result in a long-term trade agreement.

On the U.S. economic front, the Labor Department released a report showing consumer prices edged slightly higher in the month of June.

The Labor Department said its consumer price index inched up by 0.1 percent in June after rising by 0.2 percent in May. Economists had expected consumer prices to increase by 0.2 percent.

Excluding food and energy prices, core consumer prices rose by 0.2 percent for the second consecutive month, matching economist estimates.

While consumer prices showed only a modest monthly increase, the annual rate of growth still accelerated to a more than six-year high of 2.9 percent in June from 2.8 percent in May.

Core consumer price growth also edged up to 2.3 percent in June from 2.2 percent in May, reaching its highest level since January of 2017.

A separate report from the Labor Department showed first-time claims for unemployment benefits fell by more than expected in the week ended July 7th.

The report said initial jobless claims dropped to 214,000, a decrease of 18,000 from the previous week's revised level of 232,000.

Economists had expected jobless claims to edge down to 225,000 from the 231,000 originally reported for the previous week.

Telecom stocks have shown a strong move back to the upside, with the NYSE Arca Telecom Index climbing by 1.7 percent after falling by 1.7 percent in the previous session.

Pharmaceutical, biotechnology, and computer hardware stocks have also moved notably higher, while energy stocks are seeing further downside amid a continued decrease by the price of crude oil.

In overseas trading, stock markets across the Asia-Pacific region rebounded during trading on Thursday following yesterday's sell-off. Japan's Nikkei 225 Index jumped by 1.2 percent, while China's Shanghai Composite Index spiked by 2.2 percent.

The major European markets have also moved back to the upside on the day. While the German DAX Index has risen by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 0.8 percent.

In the bond market, treasuries have climbed back near the unchanged line after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.849 percent.

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