Stocks Close Mostly Higher Following Mixed Economic Data - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Thursday, more than offsetting the modest weakness seen in the previous session. With the gains on the day, the S&P 500 reached another new record closing high.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 65.56 points or 0.4 percent to 16,698.74, the Nasdaq climbed 22.87 points or 0.5 percent to 4,247.95 and the S&P 500 advanced 10.25 points or 0.5 percent to 1,920.03.

The strength on Wall Street partly reflected a positive reaction to the mixed batch of economic data released this morning, including a report from the Labor Department showing a bigger than expected drop in initial jobless claims.

The report said initial jobless claims fell to 300,000 in the week ended May 24th, a decrease of 27,000 from the previous week's revised level of 327,000. Economists had been expecting jobless claims to dip to 317,000.

With the bigger than expected decrease, jobless claims pulled back near the seven-year low of 298,000 set in the week ended May 10th.

Meanwhile, revised data from the Commerce Department showed that GDP fell by 1.0 percent in the first quarter compared to the initial estimate for a 0.1 percent uptick.

The drop marked the first contraction in GDP since the first quarter of 2011 and was steeper than the 0.5 percent drop expected by economists.

The first quarter data was largely viewed as old news, however, with traders generally expecting a rebound in activity in the second quarter.

In other economic news, the National Association of Realtors released a report showing that pending home sales increased for the second consecutive month in April, although pending sales rose by much less than economists had anticipated.

NAR said its pending home sales index rose 0.4 percent to 97.8 in April after jumping 3.4 percent to 97.4 in March. Economists had expected the index to climb by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Sector New

While a majority of the major sectors moved higher on the day, most finished the session showing relatively modest moves.

Tobacco stocks saw considerable strength, however, with the NYSE Arca Tobacco Index advancing by 1.6 percent. Vector Group (VGR) and Lorillard (LO) turned in two of the sector's best performances.

Notable strength was also visible among oil service stocks, as reflected by the 1.3 percent gain posted by the Philadelphia Oil Service Index. The strength in the sector came as crude for July delivery climbed $0.86 to $103.58 a barrel.

Chemical, software, and internet stocks also saw some strength on the day, while electronic storage stocks moved to the downside.

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 edged up by 0.1 percent, while Hong Kong's Hang Seng Index dipped by 0.3 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index both closed just below the unchanged line.

In the bond market, treasuries saw some volatility over the course of the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.447 percent.

Looking Ahead

Trading on Friday may be impacted by another batch of economic data, including reports on personal income and spending, consumer sentiment, and Chicago-area business activity.