U.S. Stocks Holding On To Strong Gains After Early Rally

After moving sharply higher early in the session, stocks continue to see significant strength in mid-day trading on Thursday. With the strong upward move on the day, the Dow and the S&P 500 have reached new record intraday highs.

Currently, the major averages are hovering firmly in positive territory. The Dow is up 292.36 points or 0.9 percent at 34,023.25, the Nasdaq is up 162.02 points or 1.2 percent at 14,019.87 and the S&P 500 is up 43.17 points or 1.1 percent at 4,167.83.

The rally on Wall Street comes following the release of a batch of largely upbeat U.S. economic data, , including a Commerce Department report showing retail sales spiked by much more than expected in the month of March.

The Commerce Department said retail sales skyrocketed by 9.8 percent in March after tumbling by a revised 2.7 percent in February.

Economists had expected retail sales to surge up by 5.9 percent compared to the 3.0 percent slump originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales soared by 8.4 percent in March after plunging by a revised 2.5 percent in February. Ex-auto sales were expected to jump by 5.0 percent.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits pulled back by much more than anticipated in the week ended April 10th.

The Labor Department said initial jobless claims tumbled to 576,000, a decrease of 193,000 from the previous week’s revised level of 769,000.

Economists had expected jobless claims to decline to 700,000 from the 744,000 originally reported for the previous week.

With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.

The National Association of Home Builders also released a report showing a modest increase in U.S. homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 83 in April after dipping to 82 in March, matching economist estimates.

The NAHB noted the uptick in homebuilder confidence came even as builders continued to grapple with rising lumber prices and supply chain issues and consumers faced higher home prices due to a lack inventory.

Meanwhile, the Federal Reserve released a report showing a rebound by industrial production in the month of March, although the increase fell short of expectations.

The Fed said industrial production jumped by 1.4 percent in March after plunging by a downwardly revised 2.6 percent in February.

However, economists had expected production to spike by 2.8 percent compared to the 2.2 percent slump originally reported for the previous month.

The Dow has benefited from a significant advance by shares of UnitedHealth, with the managed care company jumping by 3.3 percent after reporting first quarter results that beat analyst estimates on both the top and bottom lines.

On the other hand, shares of Bank of America (BAC) have come under pressure even though the financial giant reported better than expected first quarter results.

Sector News

Gold stocks continue to see substantial strength in mid-day trading, resulting in a 4.9 percent spike by the NYSE Arca Gold Bugs Index. The index has reached its best intraday level in two months.

The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for June delivery soaring $32.40 to $1,768.70 an ounce.

Computer hardware stocks have also shown a significant move to the upside, driving the NYSE Arca Computer Hardware Index up by 1.9 percent to a record intraday high.

Dell (DELL) has helped lead the sector higher, spiking by 8.7 percent after announcing plans to spin-off its 81 percent equity ownership of VMware (VMW), forming two standalone public companies.

Software, semiconductor and commercial real estate stocks are also seeing considerable strength on the day, moving higher along with most of the other major averages.

Meanwhile, oil service stocks are among the few groups bucking the uptrend, with the Philadelphia Oil Service Index tumbling by 2.6 percent after spiking by 5.7 percent on Wednesday.

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 inched up by 0.7 percent, while China’s Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index advanced by 0.6 percent, the French CAC 40 Index and the German DAX Index rose by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries have moved sharply higher despite the strong U.S. economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 9.4 basis points at 1.544 percent.

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