Upbeat Economic Data Leads To Strength On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Wednesday, benefiting from a positive reaction to a batch of largely upbeat economic data. With the gains, the Dow and the S&P 500 reached new record closing highs and the Nasdaq climbed further above 4,000.

The major averages all ended the day in positive territory, although the Nasdaq outperformed its counterparts. While the Nasdaq climbed 27.00 points or 0.7 percent to 4,044.75, the Dow edged up 24.53 points or 0.2 percent to 16,097.33 and the S&P 500 rose 4.48 points or 0.3 percent to 1,807.23.

The strength on Wall Street came on the heels of the release of a slew of economic data, including a report from the Labor Department showing an unexpected decrease in initial jobless claims in the week ended November 23rd.

The Labor Department said initial jobless claims slid to 316,000, a decrease of 10,000 from the previous week's revised figure of 326,000. Economists had expected jobless claims to climb to 330,000.

Jobless claims continued to offset the sharp jump seen as a result of technical issues in the first week of October, falling to their lowest level in almost two months.

Adding to the positive sentiment, revised data released by Thomson Reuters and the University of Michigan showed an improvement in consumer sentiment in the month of November.

The report said the final reading on the consumer sentiment index for November came in at 75.1, reflecting a substantial upward revision from the preliminary reading of 72.0. With the upward revision, the index came in above the October reading of 73.2.

The Conference Board also released a report showing that its reading on leading U.S. economic indicators unexpectedly rose for the fourth straight month in October.

On the other hand, the Commerce Department released a separate report showing a pullback in new orders for U.S. manufactured durable goods in the month of October.

The report said durable goods orders fell by 2.0 percent in October after jumping by an upwardly revised 4.1 percent in September. The drop in orders matched economist estimates.

Excluding a decrease in orders for transportation equipment, durable goods orders edged down by a more modest 0.1 percent in October compared to a 0.2 percent increase in September.

In corporate news, shares of Hewlett-Packard (HPQ) jumped 9.1 percent after the tech giant reported better than expected fourth quarter results. The company also provided first quarter and full-year earnings guidance in line with estimates.

Sector News

With Hewlett-Packard helping to lead the way higher, computer hardware stocks showed a strong move to the upside on the day. The NYSE Arca Computer Hardware Index surged up by 2.1 percent to a record closing high.

Along with HP, Apple (AAPL) and Western Digital (WDC) also posted notable gains, advancing by 2.4 percent and 1.8 percent, respectively.

Considerable strength also emerged among airline stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Airline Index. With the gain, the index reached its best closing level in eleven years.

The strength among airline stocks came on the heels of news that American Airlines and US Airways (LCC) cleared the last major hurdle to their long-awaited merger.

Commercial real estate, biotechnology, and networking stocks also saw some strength on the day, while weakness was visible among energy stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index climbed by 0.5 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index advanced by 0.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index rose by 0.4 percent and 0.2 percent, respectively.

In the bond market, treasuries gave back some ground after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4 basis points to 2.736 percent.

Looking Ahead

Following the Thanksgiving Day holiday on Thursday, trading activity on Friday is likely to be subdued amid a lack of major U.S. economic data.

Some traders are likely to remain away from their desks, as the U.S. stock markets will only be open for a half-day of trading.