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U.S. Stocks Remain Mostly Positive, S&P 500 Hovering Above 4,000

wallstreet nov01 01apr21 lt

Stocks are mostly positive in mid-day trading on Thursday, with technology stocks holding on to strong gains after an early rally. With the upward move on the day, the S&P 500 has reached a new record intraday high above 4,000.

After underperforming earlier in the session, the Dow has recently joined the Nasdaq and S&P 500 firmly in positive territory. The Dow is up 161.08 points or 0.5 percent at 33,142.63, the Nasdaq is up 199.68 points or 1.5 percent at 13,446.55 and the S&P 500 is up 37.47 points or 0.9 percent at 4,010.36.

The extended rally by technology stocks, as reflected by the jump by the tech-heavy Nasdaq, is partly in reaction to upbeat news out of the semiconductor sector.

Shares of Micron Technology (MU) has surged up by 4.6 percent after the chipmaker reported better than expected fiscal second quarter results and provided upbeat guidance for the current quarter.

Taiwan Semiconductor (TSM) has also shown a strong move to the upside after unveiling capacity expansion plans amid rising chip demand.

Tech stocks have also benefited from a pullback by treasury yields, with the yield on the benchmark ten-year note moving notably lower after ending the previous session at its highest closing level in over a year.

Positive sentiment has also been generated in reaction to a report from the Institute for Supply Management showing the pace of growth in U.S. manufacturing activity accelerated by much more than anticipated in the month of March.

The ISM said its Manufacturing PMI jumped to 64.7 in March from 60.8 in February, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to inch up to 61.3.

With the much bigger than expected increase, the Manufacturing PMI reached its highest level since hitting 69.9 in December of 1983.

Meanwhile, the Labor Department released a report showing first-time claims for U.S. unemployment benefits rebounded from their lowest level in a year in the week ended March 27th.

The report said initial jobless claims rose to 719,000, an increase of 61,000 from the previous week's revised level of 658,000.

Economists had expected jobless claims to edge down to 680,000 from the 684,000 originally reported for the previous week.

The downwardly revised number of claims in the previous week was the lowest since the week ended March 14, 2020, just before the start of the coronavirus lockdowns.

Traders are also reacting to President Joe Biden's speech regarding his $2 trillion infrastructure and economic recovery plan.

The massive proposal, which would partly paid for by higher corporate taxes, is likely to face intense opposition from Republicans.

Sector News

Gold stocks continue to see significant strength in the mid-day trading, with the NYSE Arca Gold Bugs Index surging up by 2.8 percent.

The rally by gold stocks as the price of gold for June delivery is climbing $14.20 to $1,729.80 an ounce, extending the rebound seen in the previous session.

Considerable strength also remains visible among semiconductor stocks, as reflected by the 2.5 percent jump by the Philadelphia Semiconductor Index. The index reached its best intraday level in over a month earlier in the session.

Software and biotechnology stocks are also holding on to strong gains, driving the Dow Jones U.S. Software Index and the NYSE Arca Biotechnology Index up by 2.5 percent and 2 percent, respectively.

Brokerage, networking and housing stocks are also seeing notable strength on the day, while steel stocks continue to buck the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index spiked by 2 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index climbed by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries have rebounded after coming under pressure late in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.1 basis points at 1.675 percent.

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