Draghi Comments, Economic Data Lead To Rally On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Thursday, as traders reacted to several positive catalysts. With the strong gains on the day, the major averages ended the session at their best closing levels in two months.

The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Dow soared 320.55 points or 1.9 percent to 17,489.16, the Nasdaq surged up 79.93 points or 1.7 percent to 4,920.05 and the S&P 500 jumped 33.57 points or 1.7 percent to 2,052.51.

The rally on Wall Street was partly in reaction to comments from European Central Bank President Mario Draghi signaling that the bank will consider providing further stimulus.

In remarks after the ECB kept interest rates unchanged, Draghi said officials discussed lowering the deposit rate, which is already negative.

Traders also reacted positively to some upbeat U.S. economic news, including a report from the National Association of Realtors showing a much bigger than expected rebound in existing home sales in September.

NAR said existing home sales jumped 4.7 percent to an annual rate of 5.55 million in September from a slightly downwardly revised 5.30 million in August.

Economists had expected existing home sales to climb to a rate of 5.35 million from the 5.31 million originally reported for the previous month.

A separate report from the Labor Department showed that initial jobless claims rose by less than expected in the week ended October 17th.

On the earnings front, shares of McDonald's (MCD) moved sharply higher after the fast good giant reported better than expected third quarter earnings and revenues as well as an increase in global comparable sales.

Fellow Dow components Caterpillar (CAT) and 3M (MMM) also moved to the upside after reporting their quarterly results.

Meanwhile, shares of American Express (AXP) came under pressure after the credit card giant reported third quarter earnings that came in below analyst estimates.

Sector News

Most of the major sectors showed strong moves to the upside on the day, reflecting broad based buying interest on Wall Street.

Substantial strength was visible among semiconductor stocks, as reflected by the 3.5 percent gain posted by the Philadelphia Semiconductor Index. With the gain, the index reached its best closing level in over three months.

Steel stocks also posted particularly strong gains, resulting in a 3.3 percent jump by the NYSE Arca Steel Index. The gain by the index came after it closed lower in the four previous sessions.

Carpenter Technology (CRS) turned in one of the steel sector's best performances despite reporting weaker than expected first quarter results.

Railroad stocks also saw considerable strength on the day, driving the Dow Jones Railroads Index up by 2.9 percent. Guangshen Railway (GSH) and Union Pacific (UNP) posted standout gains.

Computer hardware, chemical, telecom and airline stocks also moved notably higher, while natural gas stocks were among the few groups to buck the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slid by 0.6 percent, while China's Shanghai Composite Index jumped by 1.5 percent.

Meanwhile, the major European markets all moved to the upside. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index surged up by 2.3 percent and 2.5 percent, respectively.

In the bond market, treasuries showed a lack of direction on the day before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.025 percent.

Looking Ahead

Amid a quiet day on the U.S. economic front, trading on Friday may be impacted by earnings news from companies such as American Airlines (AAL), Procter & Gamble (PG), and Whirlpool (WHR).