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Major Averages Turning In Mixed Performance Following Yesterday's Rally

wallstreet2 16dec21 lt

Following the rally seen late in the previous session, the major U.S. stock indexes have moved in opposite directions in morning trading on Thursday. While the Dow is extending yesterday's strong upward move, the tech-heavy Nasdaq is giving back ground.

Currently, the major averages remain on opposite sides of the unchanged line. The Nasdaq is down 109.03 points or 0.7 percent at 15,456.55, but the Dow is up 230.19 points or 0.6 percent at 36,157.62 and the S&P 500 is up 6.22 points or 0.1 percent at 4,716.07.

The mixed performance on Wall Street comes as traders continue to digest the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

The Fed announced its widely expected decision to accelerate the pace of tapering its asset purchases and forecast as many as three interest rate hikes next year.

While some stocks continue to benefit from reduced uncertainty about the outlook for monetary policy, high-growth tech stocks are partly offsetting yesterday's rally amid concerns about the impact of higher interest rates.

Traders are also reacting to a slew of U.S. economic data, including a Labor Department report showing a modest rebound in first-time claims for unemployment benefits in the week ended December 11th.

The Labor Department said initial jobless claims rose to 206,000, an increase of 18,000 from the previous week's revised level of 188,000.

Economists had expected jobless claims to inch up to 195,000 from the 184,000 originally reported for the previous week.

The slightly bigger than expected increase came after jobless claims fell to their lowest level since 1969 in the previous week.

The Fed also released a report showing U.S. industrial production increased by less than expected in the month of November.

The report said industrial production rose by 0.5 percent in November after surging by an upwardly revised 1.7 percent in October.

Economists had expected industrial production to climb by 0.7 percent compared to the 1.6 percent jump originally reported for the previous month.

A separate report from the Commerce Department showed housing starts and building permits both surged by much more than expected in the month of November.

Meanwhile, the Philadelphia Federal Reserve released a report showing a substantial slowdown in the pace of growth in regional manufacturing activity in December.

Gold stocks have moved sharply higher following recent weakness, driving the NYSE Arca Gold Bugs Index up by 3.8 percent. The index ended the previous session at its lowest closing level at a two-month closing low.

The rebound by gold stocks comes amid a significant increase by the price of the precious metal, with gold for February delivery surging $33.30 to $1,797.80 an ounce.

Substantial strength has also emerged among steel stocks, as reflected by the 3.5 percent spike by the NYSE Arca Steel Index.

Energy, banking and telecom stocks are also seeing considerable strength on the day, while weakness among semiconductor and software stocks is weighing on the tech-heavy Nasdaq.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index spiked by 2.1 percent, while China's Shanghai Composite Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has jumped by 1.2 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both up by 1.4 percent.

In the bond market, treasuries have moved higher over the course of the morning after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3 basis points at 1.433 percent.

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