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U.S. Stocks Close Firmly Positive Following Late-Day Advance

wallstreet sept19 06jun19 lt

After showing a lack of direction throughout much of the session, stocks showed a notable advance late in the trading day on Thursday. With the late-day jump, the major averages extended the strong upward move seen over the two previous sessions.

The major averages pulled back off their best levels of the day going into the close but remained firmly positive. The Dow advanced 181.09 points or 0.7 percent to 25,720.66, the Nasdaq rose 40.08 points or 0.5 percent to 7,615.55 and the S&P 500 climbed 17.34 points or 0.6 percent to 2,843.49.

Considerable buying interest was generated late in the session after a report from Bloomberg News indicating the U.S. is considering delaying President Donald Trump's threatened tariffs on Mexico.

A person familiar with the matter told Bloomberg that Mexico is pushing for more time to negotiate amid concerns the two sides won't reach an agreement on all the steps Mexico needs to take to stop the flow of migrants before a Monday deadline.

Bloomberg was told by a U.S. official that the most likely outcome is still that a 5 percent tariff goes into effect but that the duties could be short-lived if Mexico follows through on its promises.

Earlier in the session, traders seemed reluctant to make significant moves ahead of the release of the Labor Department's monthly jobs report on Friday.

The report is expected to show employment increased by 185,000 jobs in May after surging up by 263,000 jobs in April, while the unemployment rate is expected to hold at 3.6 percent.

The strength of the jobs data could have a notable impact on the perceived prospects for a near-term interest rate cut by the Federal Reserve.

A day ahead of the release of the more closely watched monthly report, the Labor Department released a report showing first-time claims for U.S. unemployment benefits came in unchanged in the week ended June 1st.

The report said initial jobless claims came in at 218,000, unchanged from the previous week's revised level. Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.

A separate report released by the Commerce Department showed the U.S. trade deficit narrowed in the month of April.

The Commerce Department said the trade deficit narrowed to $50.8 billion in April from a revised $51.9 billion in March. Economists had expected the deficit to widen to $50.7 billion from the $50.0 billion originally reported for the previous month.

The narrower deficit came as the value of imports fell by $5.7 billion or 2.2 percent to $257.6 billion, while the value of exports dropped by $4.6 billion or 2.2 percent to $206.8 billion.

Sector News

Networking stocks moved sharply higher over the course of the session, resulting in a 2 percent spike by the NYSE Arca Networking Index.

Ciena (CIEN) led the sector higher, soaring by 26.7 percent after the networking company reported fiscal second quarter results well above analyst estimates.

Significant strength also emerged among oil stocks, as reflected by the 1.7 percent jump by the NYSE Arca Oil Index. The strength in the sector came as the price of crude oil for July delivery climbed $0.91 to $52.59 a barrel.

Semiconductor, gold, software, and tobacco stocks also showed notable moves to the upside, contributing to the late-day advance by the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. China's Shanghai Composite Index tumbled by 1.2 percent and Japan's Nikkei 225 Index closed just below the unchanged line, while Hong Kong's Hang Seng Index rose by 0.3 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index climbed by 0.6 percent, the German DAX Index and the French CAC 40 Index fell by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries closed roughly flat after seeing initial strength for the second straight session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.124 percent after hitting a low of 2.092 percent.

Looking Ahead

The monthly jobs report is likely to be the spotlight on Friday, although traders are also likely to keep a close eye out for any developments on the trade front.

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