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U.S. Close Sharply Higher Following Late-Day Rally

wallstreet oct24 25jun20 lt

Stocks showed a lack of direction throughout much of the trading day on Thursday before moving sharply higher in the final hour of trading. The late-day rally partly offset the sell-off seen in the previous session.

The major averages finished the day just off their highs of the session. The Dow shot up 299.66 points or 1.2 percent to 25,745.60, the Nasdaq jumped 107.84 points or 1.1 percent to 10,017.00 and the S&P 500 surged up 33.43 points or 1.1 percent to 3,083.76.

Financial stocks helped lead the markets higher late in the session, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index soaring by 3.4 percent and 2.9 percent, respectively.

The strength among financial stocks came amid news U.S. regulators plan to ease banking regulations, including allowing banks to more easily make investments in riskier funds such as venture capital funds.

Traders were also looking ahead to the release of the results of the Federal Reserve's stress tests after the close of trading.

Significant strength was also visible among oil service stocks, as reflected by the 3.4 percent jump by the Philadelphia Oil Service Index. The index rebounded after hitting its lowest intraday level in a month.

Oil service stocks turned higher along with the price of crude oil, with crude for August delivery climbing $0.71 to $38.72 a barrel after hitting a low of $37.08 a barrel.

Airline, steel, and biotechnology stocks also showed strong moves to the upside on the day, moving higher along with most of the other major sectors.

The choppy trading seen for most of the session came as weighed recent optimism about an economic recovery against spiking coronavirus cases in a number of states.

According to a tally by NBC News, the U.S. saw a record 45,557 reported Wednesday, surpassing the peak seen during the first wave of the coronavirus on April 26th.

Traders may be worried about the possibility of states reimposing restrictions on businesses, although the Trump administration has ruled out another lockdown.

Texas Governor Greg Abbott announced that the state will pause its reopening plan due to the recent jump in coronavirus cases.

On the economic front, a report from the Labor Department showed a much smaller than expected drop in initial jobless claims in the week ended June 20th, but the report also showed a notable decrease in continuing claims.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, tumbled by 767,000 to 19.522 million in the week ended June 13th, hitting their lowest level since mid-April.

A separate report from the Commerce Department also showed a substantial rebound in durable goods orders in the month of May.

The Commerce Department said durable goods orders spiked by 15.8 percent in May after plunging by a revised 18.1 percent in April.

Economists had expected durable goods orders to surge up by 10.9 percent compared to the 17.7 percent nosedive that had been reported for the previous month.

Excluding a significant rebound in orders for transportation equipment, durable goods orders still jumped by 4.0 percent in May after tumbling by 8.2 percent in April. Economists had expected a 2.5 percent increase.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index tumbled by 1.2 percent, while Australia's S&P/ASX 200 Index plummeted by 2.5 percent.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index jumped by 1 percent, the German DAX Index advanced by 0.7 percent and the U.K.'s FTSE 100 Index rose by 0.4 percent.

In the bond market, treasuries gave back ground after seeing initial strength but still closed modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 0.674 percent.

Looking Ahead

News on the coronavirus front may attract attention on Friday, overshadowing reports on personal income and spending and consumer sentiment.

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