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Stocks Move To The Upside, Nasdaq Tops Record Closing High - U.S. Commentary

wallstreet 112014 23Apr15

After initially showing a lack of direction, stocks have moved to the upside in recent trading on Thursday. The upward move lifted the Nasdaq above its record closing high set in March of 2000, although the tech-heavy index has given back some ground since then.

Currently, the major averages are holding on to modest gains. The Dow is up 48.62 points or 0.3 percent at 18,086.89, the Nasdaq is up 12.53 points or 0.3 percent at 5,047.70 and the S&P 500 is up 5.92 points or 0.3 percent at 2,113.88.

The modest strength that has emerged on Wall Street may partly reflect a positive reaction to the latest batch of earnings news from big-name companies.

Telecom giant AT&T (T) and e-commerce giant eBay (EBAY) have both moved notably higher after reporting their quarterly results.

The reaction to the earnings news hasn't all been positive, however, with General Motors (GM) and 3M (MMM) showing notable moves to the downside.

Facebook (FB), Qualcomm (QCOM), Caterpillar (CAT), PepsiCo (PEP), and Procter & Gamble (PG) are among the other big-name companies that recently reported earnings.

Traders may also be expressing optimism that the Federal Reserve will delay its planned increase in interest rates following the release of disappointing housing data.

The Commerce Department released a report showing that new home sales plunged 11.4 percent to an annual rate of 481,000 in March after jumping 5.6 percent to a revised rate of 543,000 in February. Economists had expected new home sales to drop to an annual rate of 518,000.

With the bigger than expected decrease, the annual rate of new home sales gave back ground after reaching a seven-year high in February.

Rob Carnell, chief international economist at ING, said, "There is some possibility of weather being at play in these numbers, with abnormally cold weather in the North East in March, and abnormally wet weather in the South, the two regions seeing the biggest declines in sales."

"So for now, the jury remains out in terms of any data bounce," he added. "But the coming dataflow over the coming days is unlikely to rescue June rate hike thoughts, being dominated by what looks likely to be a terrible 1Q15 GDP figure."

A separate report from the Labor Department showed an unexpected uptick in initial jobless claims in the week ended April 18th, although claims remained below 300,000.

Sector News

Steel stocks have shown a substantial move to the upside over the course of the trading day, driving the NYSE Arca Steel Index up by 3.5 percent. With the gain, the index has reached its best intraday level in almost two months.

Reliance Steel (RS) has helped to lead the sector higher, jumping by 9.2 percent after reporting better than expected first quarter results and providing upbeat guidance.

Considerable strength is also visible among oil service stocks, as reflected by the 2.8 percent gain being posted by the Philadelphia Oil Service Index. The strength in the sector comes as crude for June delivery is surging up $2.07 to $58.23 a barrel.

Gold and natural gas stocks have also moved notably higher on the day, while significant weakness among housing and semiconductor stocks has helped to limit the upside for the markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

The major European markets also turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index advanced by 0.4 percent, the French CAC 40 Index dropped by 0.6 percent and the German DAX Index tumbled by 1.2 percent.

In the bond market, treasuries continue to show a lack of direction after trending lower over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.965 percent.

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