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Nasdaq Reaches New Record High, Dow & S&P 500 Close Nearly Flat

wallstreet aug24 21jan21 lt

Stocks turned in a relatively lackluster performance during trading on Thursday, although the tech-heavy Nasdaq still climbed to a near record closing high. The Dow and the S&P 500 bounced back and forth across the unchanged line before closing nearly flat.

While the Nasdaq climbed 73.67 points or 0.6 percent to 13,530.92, the S&P 500 inched up 1.22 points or less than a tenth of a percent to 3,853.07 and the Dow edged down 12.37 points or less than a tenth of a percent to 31,176.01.

The choppy trading on Wall Street came as traders expressed 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.

Sector News

Energy stocks saw substantial weakness on the day amid a modest decrease by the price of crude oil. In its first day as the front-month contract, crude for March delivery dipped $0.18 to $53.13 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 4.6 percent and the NYSE Arca Oil Index tumbled by 3 percent.

Significant weakness was also visible among airline stocks, as reflected by the 2.2 percent slump by the NYSE Arca Airline Index.

Chemical, transportation and steel stocks also moved notably lower over the course of the session despite the lackluster performance by the broader markets.

On the other hand, computer hardware and semiconductor stocks showed strong moves to the upside, contributing to the advance by the tech-heavy Nasdaq.

Other Markets

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 moved to the downside over the course of the session. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index fell by 0.4 percent and the French CAC 40 Index slid by 0.7 percent.

In the bond market, treasuries saw 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, inched up by 1.9 basis points to 1.109 percent.

Looking Ahead

Reaction to the latest earnings news may drive trading on Friday, with tech giants Intel (INTC) and IBM Corp. (IBM) among the companies releasing their quarterly results after the close of today's trading.

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