Stocks are experiencing moderate gains in Thursday's trading session, rebounding after the previous day's sell-off. While the major indices have turned positive, investors remain somewhat cautious in their buying activities.
Currently, the major indices remain in positive territory but are off their session highs. The Dow has risen by 151.55 points, or 0.4%, to 42,478.42. Similarly, the Nasdaq has increased by 82.08 points, or 0.4%, to 19,474.77, and the S&P 500 has gained 21.98 points, or 0.4%, to 5,894.14.
The market saw a strong recovery at the opening bell, as traders sought opportunities to purchase stocks at discounted prices following yesterday's significant declines. On Wednesday, the Dow recorded its tenth consecutive loss – the longest streak since 1974 – falling to its lowest closing level in over a month, while the broader S&P 500 also reached a one-month low.
The downturn was triggered by the Federal Reserve's anticipated decision to reduce interest rates by a quarter point, coupled with a forecast of fewer rate cuts next year than previously expected.
Throughout the session, investor enthusiasm dwindled somewhat, as largely positive economic data bolstered the Federal Reserve's cautious approach to further rate reductions. The Commerce Department released a report indicating an unexpectedly strong surge in the U.S. economy's growth rate in the third quarter. Gross Domestic Product (GDP) climbed by 3.1%, a notable revision from the previously reported 2.8%. Economists had forecasted the growth rate would remain unchanged.
Additionally, the Labor Department reported a greater-than-expected decrease in first-time claims for unemployment benefits for the week ending December 14th. Initial jobless claims fell to 220,000, a drop of 22,000 from the prior week’s level of 242,000, while economists had predicted a decline to 230,000.
Sector Analysis
Even with the broader market's modest rebound, stocks in interest rate-sensitive sectors like housing are continuing their decline. The Philadelphia Housing Sector Index has dropped by 2.5%, reaching its lowest intraday level in over five months. This weakness persists despite a report from the National Association of Realtors indicating that existing home sales surged to an eight-month high in November.
Semiconductor stocks are also facing continued pressure, with the Philadelphia Semiconductor Index falling by 1.2%. Micron (MU) is significantly dragging the sector lower, plummeting by 17.8% despite better-than-expected fiscal first-quarter earnings, due to disappointing guidance for the second quarter.
Stocks in computer hardware and biotechnology are showing notable weakness, whereas airline and utility stocks have made a strong recovery.
Global Market Overview
In international markets, Asian stocks traded predominantly lower on Thursday. Japan’s Nikkei 225 Index decreased by 0.7%, and China’s Shanghai Composite Index fell by 0.4%. European markets also faced downward pressure, with the U.K.’s FTSE 100 Index down 1.1%, and both Germany’s DAX and France’s CAC 40 Indices declining by 1.2%.
In the bond market, treasuries continue to experience significant declines from the previous session. Consequently, the yield on the benchmark ten-year note rose by 6.4 basis points, reaching 4.562%.
The material has been provided by InstaForex Company -
www.instaforex.com
