Stocks Remain Firmly Positive Following Morning Rally - U.S. Commentary

(RTTNews) - Stocks continue to see substantial strength in mid-day trading on Thursday, extending the rally seen in the previous session. The gains on the day have further offset the recent pullback by the markets, with the Dow turning positive for the New Year.

The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 287.85 points or 1.6 percent at 17,872.37, the Nasdaq is up 80.09 points or 1.7 percent at 4,730.55 and the S&P 500 is up 32.79 points or 1.6 percent at 2,058.69.

The continued strength on Wall Street partly reflects optimism about the outlook for monetary policy following yesterday's release of the minutes of the latest Federal Reserve meeting.

While the minutes did not offer much new information, they seemed to reassure traders that the Fed will not start raising interest rates before late April.

Remarks from Chicago Fed President Charles Evens suggesting that it could be a "catastrophe" to begin raising rates too early have also eased concerns about the outlook for monetary policy.

Traders may also be expressing some optimism about the Labor Department's monthly jobs report due to be released Friday morning.

Economists expect employment to increase by about 245,000 jobs in December after jumping by 321,000 jobs in November.

The unemployment rate is expected to dip to 5.7 percent from 5.8 percent, hitting its lowest level since June of 2008.

Before the start of today's trading, the Labor Department released a report showing a modest drop in initial jobless claims in the week ended January 3rd.

The report said initial jobless claims edged down to 294,000, a decrease of 4,000 from the previous week's unrevised level of 298,000. Economists had expected jobless claims to dip to 290,000.

Sector News

Once again, the markets are experiencing broad based buying interest, resulting in significant strength in most of the major sectors.

Semiconductor stocks are turning in some of the market's best performances on the day, driving the Philadelphia Semiconductor Index up by 2.8 percent. The index continues to regain ground after ending Tuesday's trading at its lowest closing level in well over a month.

Within the semiconductor sector, Marvell Technology (MRVL), Freescale Semiconductor (FSL), and Micron Technology (MU) are posting standout gains.

Considerable strength has also emerged among trucking stocks, as reflected by the 2.7 percent gain being posted by the Dow Jones Trucking Index. The gain by the index comes after it ended the previous session at a two-month closing low.

Energy, computer hardware, chemical, and housing stocks are also seeing notable strength, with the Philadelphia Housing Sector Index jumping to a seven-year high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index shot up by 1.7 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.

The major European markets showed even more substantial moves to the upside on the day. While the U.K.'s FTSE 100 Index jumped by 2.3 percent, the German DAX Index and the French CAC 40 Index soared by 3.4 percent and 3.6 percent, respectively.

In the bond market, treasuries are giving back ground after trending higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.6 basis points at 2.02 percent.