Stocks have shown a strong move back to the upside in morning trading on Thursday following the sell-off seen in the previous session. The major averages have all climbed firmly into positive territory.
In recent trading, the major averages have reached new highs for the session. The Dow is up 401.05 points or 1.2 percent at 33,988.71, the Nasdaq is up 192.40 points or 1.5 percent at 13,224.08 and the S&P 500 is up 50.63 points or 1.3 percent at 4,113.67.
Bargain hunting is contributing to the rebound on Wall Street after the steep drop on Wednesday dragged the major averages down to their lowest closing levels in over a month.
While inflation worries led to the sell-off in the previous session, traders have shrugged off a Labor Department report showing producer prices increased by more than expected in the month of April.
The Labor Department said its producer price index for final demand rose by 0.6 percent in April after jumping by 1.0 percent in March. Economists had expected producer prices to increase by 0.3 percent.
Excluding prices for food, energy, and trade services, core producer prices, advanced by 0.7 percent in April after climbing by 0.6 percent in March. Core prices were expected to rise by 0.4 percent.
The report also showed the annual rate of producer price growth accelerated to 6.2 percent in April from 4.2 percent in March, with prices showing the biggest annual increase since 12-month data were first calculated in November of 2010.
Meanwhile, a separate report from the Labor Department showed first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 8th.
The report said initial jobless claims dipped to 473,000, a decrease of 34,000 from the previous week’s revised level of 507,000.
Economists had expected jobless claims to edge down to 490,000 from the 498,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.
Airline stocks are turning in some of the market’s best performances on the day, with the NYSE Arca Airline Index soaring by 2.8 percent.
Substantial strength has also emerged among housing stocks, as reflected by the 2.4 percent jump by the Philadelphia Housing Sector Index.
Networking, semiconductor and computer hardware stocks are also seeing considerable strength after falling sharply in the previous session.
Most of the other major sectors have also moved back to the upside, with notable strength visible among brokerage, steel and chemical stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index dove by 2.5 percent, while China’s Shanghai Composite Index slumped by 1 percent.
Meanwhile, the major European markets have turned mixed on the day. While the U.K.’s FTSE 100 Index is down by 0.9 percent, the French CAC 40 Index is just above the unchanged line and the German DAX Index is up by 0.1 percent.
In the bond market, treasuries are regaining ground after moving notably lower in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 1.674 percent.
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