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U.S. Stocks Close Modestly Higher Following News Of Brexit Deal

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Stocks fluctuated over the course of the trading session on Thursday but eventually ending the day modestly higher. The major averages all closed in positive territory, although buying interest was somewhat subdued.

The Dow bounced back and forth across the unchanged line before closing up 23.90 points or 0.1 percent to 27,025.88. The Nasdaq climbed 32.67 points or 0.4 percent to 8,156.85 and the S&P 500 rose 8.26 points or 0.3 percent to 2,997.95.

Early buying interest was generated in reaction to news that U.K. and European Union negotiators have reached a last-minute Brexit deal.

European Commission President Jean-Claude Juncker described the deal as "fair and balanced" for the EU and the U.K. and urged member nations to back the agreement.

The deal could eliminate some of the Brexit uncertainty hanging over the global markets, although it remains to be seen if the agreement will be approved by U.K. lawmakers.

Uncertainty about final approval of the deal helped to limit the upside for the markets along with the release of some disappointing U.S. economic data.

Just before the start of trading, the Federal Reserve released a report showing a bigger than expected decrease in industrial production, with the strike at General Motors (GM) contributing to a drop in manufacturing output.

The Fed said industrial production fell by 0.4 percent in September after climbing by an upwardly revised 0.8 percent in August.

Economists had expected production to edge down by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.

A separate report released by the Commerce Department showed a sharp pullback in housing starts in the month of September.

The Commerce Department said housing starts plunged by 9.4 percent to an annual rate of 1.256 million in September after soaring by 15.1 percent to a revised 1.386 million in August.

Economists had expected housing starts to drop by 3.2 percent to an annual rate of 1.320 million from the 1.364 million originally reported for the previous month.

The report said building permits also slumped by 2.7 percent to an annual rate of 1.387 million in September after jumping by 8.2 percent to a revised 1.425 million in August.

Building permits, an indicator of future housing demand, had been expected to tumble by 4.9 percent to a rate of 1.350 million from the 1.419 million originally reported for the previous month.

Sector News

Tobacco stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Tobacco Index up by 2.8 percent.

The rally by tobacco stocks came as the Centers for Disease Control and Prevention said the death toll from a purportedly vaping-related illness has risen to 33.

Significant strength also emerged among gold stocks, as reflected by the 2.3 percent jump by the NYSE Arca Gold Bugs Index.

The strength in the gold sector came amid an increase by the price of the precious metal, with gold for December delivery rising $4.40 to $1,498.30 an ounce.

Networking and telecom stocks also saw some strength on the day, while oil service stocks moved to the downside over the course of the session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both edged down by 0.1 percent, while Australia's S&P/ASX 200 Index slid by 0.8 percent.

Meanwhile, the major European markets turned mixed over the course of the session. While the U.K.'s FTSE 100 Index rose by 0.2 percent, the German DAX Index edged down by 0.1 percent and the French CAC 40 Index fell by 0.4 percent.

In the bond market, treasuries showed a lack of direction before ending the day roughly flat. 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 1.757 percent.

Looking Ahead

Earnings news may be in focus on Friday, with American Express (AXP) and Coca-Cola (KO) among the companies releasing their quarterly results before the start of trading.

A report on leading U.S. economic indicators may also attract attention along with remarks by several Federal Reserve officials.

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