Stocks have given back ground some ground after an initial move to the upside but remain mostly positive in mid-day trading on Thursday. The early jump lifted the S&P 500 to a new record intraday high.
Currently, the major averages remain firmly in positive territory. The Dow is up 178.26 points or 0.7 percent at 26,682.26, the Nasdaq is up 52.21 points or 0.7 percent at 8,039.53 and the S&P 500 is up 18.67 points or 0.6 percent at 2,945.13.
The surge at the start of trading came as traders continued to react positively to the Federal Reserve's monetary policy announcement on Wednesday.
The Fed left interest rates unchanged as widely expected but signaled that the next change in interest rates is likely to be a rate cut.
While the Fed did not provide a specific time frame for lowering rates, CME Group's FedWatch Tool shows the markets are pricing in a rate cut at the next monetary policy meeting in late July.
The FedWatch Tool currently indicates a 59.5 percent chance for a 25 basis point rate cut and a 40.5 percent chance for a 50 basis point rate cut.
Traders are likely to closely watch incoming economic data in the weeks leading up to the meeting for clues about the potential for lower rates.
The Labor Department released a report this morning a modest decrease in first-time claims for U.S. unemployment benefits in the week ended June 15th.
The report said initial jobless claims dipped to 216,000, a decrease of 6,000 from the previous week's unrevised level of 222,000. Economists had expected jobless claims to edge down to 220,000.
Meanwhile, the Labor Department said the less volatile four-week moving average inched up to 218,750, an increase of 1,000 from the previous week's unrevised average of 217,750.
A separate report from the Philadelphia Federal Reserve showed regional manufacturing activity was nearly stagnant in the month of June.
The Philly Fed said its index for current general activity tumbled to 0.3 in June from 16.6 in May. While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to slip to 11.0.
With the much bigger than expected decrease, the Philly Fed Index fell to its lowest level since turning negative in February.
Sector News
Gold stocks continue to see substantial strength after an initial spike, with the NYSE Arca Gold Bugs Index soaring by 4.9 percent. With the jump, the index has reached its best intraday level in well over a year.
The rally by gold stocks comes amid a sharp increase by the price of the precious metal, as gold for August delivery is surging up $39.80 to $1,388.60 an ounce.
Similarly, a skyrocketing price of crude oil is contributing to significant strength throughout the energy sector.
With crude for July delivery jumping $2.92 to $56.68 a barrel, the Philadelphia Oil Service Index is up by 4.3 percent, the NYSE Arca Natural Gas Index is up by 2.6 percent and the NYSE Arca Oil Index is up by 2.4 percent.
Considerable strength is also visible among computer hardware, software, and semiconductor stocks, reflecting strength in the broader tech sector.
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 0.6 percent, while Hong Kong's Hang Seng Index jumped by 1.2 percent.
The major European markets also moved to the upside on the day. While the German DAX Index climbed by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 0.3 percent.
In the bond market, treasuries have moved notably higher, dragging the yield on the benchmark ten-year note below 2 percent for the first time in well over two years. The yield on the ten-year note, which moves opposite of its price, is down by 4.3 basis points at 1.986 percent.
For comments and feedback contact: editorial@rttnews.com