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Tech Stocks Continue To Lead The Way Higher On Wall Street

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Stocks showed a strong move to the upside over the course of the trading day on Thursday after showing a lack of direction earlier in the session. The Nasdaq jumped to a new record closing high, while the S&P 500 and the Dow ended the day at their best closing levels in five and two months, respectively.

The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Nasdaq surged up 109.67 points or 1 percent to 11,108.07, the Dow advanced 185.46 points or 0.7 percent to 27,386.98 and the S&P 500 climbed 21.39 points or 0.6 percent to 3,349.16.

The strength that emerged on Wall Street partly reflected substantial gains by big-name tech companies like Facebook (FB) and Apple (AAPL), which spiked by 6.5 percent and 3.5 percent, respectively.

Google parent Alphabet (GOOGL), Netflix (NFLX) and Microsoft (MSFT) also posted notable gains as tech stocks continued to outperform the broader markets.

Positive sentiment may also have been generated in reaction to a Labor Department report showing first-time claims for U.S. unemployment benefits pulled back by much more than expected in the week ended August 1st.

The report said initial jobless claims tumbled to 1.186 million, a decrease of 249,000 from the previous week's revised level of 1.435 million.

Economists had expected jobless claims to edge down to 1.415 million from the 1.434 million originally reported for the previous week.

The notable drop in jobless claims came following two consecutive weekly increases, which raised concerns the resurgence in coronavirus claims would stall the economic recovery.

"The latest jobless claims data were much better than expected and suggest that the stalling in the labor market recovery in July didn't get worse as the month came to a close," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

On Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of July.

Economists currently expected employment to jump by about 1.6 million jobs in July after spiking by 4.8 million jobs in June. The unemployment rate is expected to dip to 10.5 percent from 11.1 percent.

Meanwhile, traders also kept an eye on developments in Washington, as Democrats and Trump administration officials continue to negotiate over a new coronavirus relief bill.

Senate Majority Leader Mitch McConnell, R-Ken., and House Speaker Nancy Pelosi, D-Calif., both expressed confidence an agreement will eventually be reached in separate interviews with CNBC.

Both sides have indicated progress following recent meetings, although Senate Minority Leader Chuck Schumer, D-N.Y., told reporters on Wednesday that "wide differences" remain on certain issues.

With the talks dragging on, the White House has suggested President Donald Trump could extend unemployment benefits and an eviction moratorium by executive order, although it is unclear if he has the authority to do so.

Sector News

Despite the notable advance by the broader markets, most of the major sectors ended the day showing only modest moves.

Airline stocks showed a substantial move to the upside, however, with the NYSE Arca Airline Index surging up by 2.8 percent.

Significant strength was also visible among networking stocks, as reflected by the 2.7 percent jump by the NYSE Arca Networking Index. The index ended the session at its best closing level in over a year.

CommScope (COMM) helped lead the sector higher, spiking by 16.8 percent after reporting second quarter results that beat analyst estimates on both the top and bottom lines.

Tobacco, software and transportation stocks also saw notable strength on the day, while oil service stocks pulled back sharply amid a decrease by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index rose by 0.3 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index tumbled by 1.3 percent, the French CAC 40 Index slumped by 1 percent and the German DAX Index slid by 0.5 percent.

In the bond market, treasuries pulled back near the unchanged line after moving higher early in the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.536 percent.

Looking Ahead

The monthly jobs report is likely to be in focus on Friday, overshadowing reports on wholesale inventories and consumer credit.

Earnings news may also attract some attention along with the latest developments regarding the coronavirus relief bill.

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