Positive Reaction To Data Leads To Strength On Wall Street - U.S. Commentary

(RTTNews) - While buying interest has remained somewhat subdued, stocks have moved mostly higher over the course of the trading day on Thursday. The gains on the day are extending yesterday's strong upward move, with the Nasdaq rising to its best intraday level in almost a month.

The major averages are currently all in positive territory, although the Dow is posting only a modest gain. While the Dow is up 19.07 points or 0.1 percent at 16,552.13, the Nasdaq is up 25.46 points or 0.6 percent at 4,157.00 and the S&P 500 is up 6.21 points or 0.3 percent at 1,894.25.

The continued strength that has emerged on Wall Street on the day partly reflects a positive reaction to a mixed batch of economic.

While upbeat reports on Chinese manufacturing activity and U.S. existing home sales have generated some positive sentiment, a separate report showing a bigger than expected rebound in U.S. jobless claims has helped to limit the upside.

The preliminary results of a manufacturing survey by Markit and HSBC showed that Chinese manufacturing activity continued to contract in May, albeit at a notably slower rate.

The headline manufacturing purchasing managers' index rose 1.6 points to 49.7 in May, reaching a five-month. Economists had expected a smaller improvement to 48.3.

Additionally, the National Association of Realtors released a report showing that U.S. existing home sales rose for the first time this year in April.

NAR said existing home sales rose 1.3 percent to a seasonally adjusted annual rate of 4.65 million in April from 4.59 million in March.

On the other hand, the Labor Department released a report showing that jobless claims jumped to 326,000 in the week ended May 17th from the previous week's revised level of 298,000. Economists had been expecting jobless claims to climb to 310,000.

While the number for the previous week was upwardly revised from 297,000, it still represents the lowest number of claims in seven years.

Among individual stocks, shares of Williams-Sonoma (WSM) are moving notably higher after the home products retailer reported better than expected first quarter results and raised its full-year guidance.

Discount retailer Dollar Tree (TREE) is also turning in a particularly strong performance after raising its outlook for full-year earnings.

On the other hand, shares of Sears Holdings (SHLD) have moved to the downside after the department store operator reported a wider than expected first quarter loss amid a drop in sales.

Sector News

Biotechnology stocks are seeing significant strength on the day, with the NYSE Arca Biotechnology Index up by 2.2 percent. The index has moved toward the high end of a recent trading range and is currently poised to end the session at its best closing level in well over a month.

Nektar Therapeutics (NKTR), Vertex (VRTX), and Alexion (ALXN) are turning in some of the biotech sector's best performance.

Considerable strength is also visible among housing stocks, which have reacted positively to the existing home sales data. Reflecting the strength in the sector, the Philadelphia Housing Sector Index has advanced by 1.1 percent.

Electronic storage, brokerage, and healthcare stocks are also seeing notable strength, while most of the other major sectors have shown more modest moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.

Meanwhile, the major European markets ended the day mixed. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the French CAC 40 Index and the German DAX Index both rose by 0.2 percent.

In the bond market, treasuries have moved modestly lower, extending the downward move seen on Wednesday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 2.55 percent.