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U.S. Stocks Inch Up To Record Highs Amid Choppy Trading

wallstreet oct03 21jan21 lt

Following the strong upward move seen over the two previous sessions, stocks have fluctuated over the course of morning trading on Thursday. The major averages have been bouncing back and forth across the unchanged line but still managed to reach new record intraday highs.

Currently, the major averages are posting modest gains. The Dow is up 55.02 points or 0.2 percent at 31,243.40, the Nasdaq is up 58.14 points or 0.4 percent at 13,515.39 and the S&P 500 is up 8.72 points or 0.2 percent at 3,860.57.

The choppy trading on Wall Street comes as traders express some uncertainty about the near-term outlook for the markets following the run to record highs.

Some analysts have expressed concerns about the markets becoming overbought, but traders seem wary of missing out on further upside.

Optimism about ramped up efforts to combat the coronavirus under new President Joe Biden have also helped to prop up the markets.

Biden has revealed new details of his plan to tackle the pandemic, which includes providing more state and local funding to accelerate the vaccine rollout and using the Defense Production Act to increase production of personal protective equipment.

Traders also remain optimistic about more fiscal stimulus under Biden, who has called for a new $1.9 trillion relief package.

In U.S. economic news, the Labor Department released a report showing a pullback in initial jobless claims in the week ended January 16th.

The report said initial jobless claims fell to 900,000, a decrease of 26,000 from the previous week's revised level of 926,000.

Economists had expected jobless claims to drop to 910,000 from the 965,000 originally reported for the previous week.

Even with the downward revision, the number of claims in the previous week represented the most since reaching 1.011 million in the week ended August 22nd.

The Commerce Department also released a report showing new residential construction in the U.S. jumped by much more than expected in the month of December.

The reports paint a more positive picture of the economy, but traders may be wary that the data could ease the pressure on lawmakers to approve additional stimulus.

Computer hardware stocks have shown a strong move to the upside in morning trading, driving the NYSE Arca Computer Hardware Index up by 1.5 percent to a record intraday high.

Significant strength is also visible among housing stocks, as reflected by the 1.3 percent gain being posted by the Philadelphia Housing Sector Index.

The strength in the housing sector comes after the Commerce Department released a report showing housing starts and building permits both jumped to fourteen-year highs in December.

Retail stocks are also extending the rally seen in the previous session, with the Dow Jones U.S. Retail Index climbing by 1.3 percent to a record intraday high.

On the other hand, airline stocks have come under pressure in morning trading, dragging the NYSE Arca Airline Index down by 2.5 percent.

A modest pullback by the price of crude oil is also contributing to notable weakness among energy stocks, as crude for March delivery is slipping $0.30 to $53.01 a barrel.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index climbed by 0.8 percent, while China's Shanghai Composite Index surged up by 1.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.1 percent, the U.K.'s FTSE 100 Index is down by 0.2 percent and the French CAC 40 Index is down by 0.5 percent.

In the bond market, treasuries are seeing modest weakness after closing nearly flat for two straight days. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.8 basis points at 1.108 percent.

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