Major Averages Hovering In Positive Territory In Mid-Day Trading

After fluctuating early in the session, stocks are mostly positive in mid-day trading on Thursday. With the upward move on the day, the major averages are adding to the gains posted in the previous session.

The major averages have moved roughly sideways in recent trading, hovering in positive territory. The Dow is up 127.15 points or 0.5 percent at 27,908.85, the Nasdaq is up 114.00 points or 1 percent at 11,281.51 and the S&P 500 is up 19.68 points or 0.6 percent at 3,382.68.

The strength on Wall Street comes as traders seem optimistic about a new stimulus bill after House Democrats delayed a vote on their coronavirus relief package.

The delayed vote on the $2.2 trillion Democratic bill, which Republican leaders have flatly rejected, is intended to give lawmakers more time to reach an agreement.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach an agreement on a new bill during a meeting on Wednesday but noted talks will continue.

However, stocks pulled back off their early highs after a source told NBC News that Pelosi sounded “frustrated” and “fired up” when talking about the state of the discussions during a Democratic whip conference call

Pelosi said the GOP does not “share our values” of want to make necessary investments in state and local funding and health-related priorities, the source told NBC News.

On the U.S. economic front, the Labor Department released a report showing a bigger than expected drop in first-time claims for U.S. unemployment benefits in the week ended September 26th.

The report said initial jobless claims fell to 837,000, a decrease of 36,000 from the previous week’s revised level of 873,000.

Economists had expected jobless claims to dip to 850,000 from the 870,000 originally reported for the previous week.

Meanwhile, the Commerce Department released a separate report showing a steep drop in U.S. personal income in the month of August, with the sharp pullback reflecting a decrease in unemployment insurance benefits.

The Commerce Department said personal income tumbled by 2.7 percent in August after rising by an upwardly revised 0.5 percent in July.

Economists had expected personal income to slump by 2.5 percent compared to the 0.4 percent increase originally reported for the previous month.

At the same time, the report said personal spending climbed by 1.0 percent in August after jumping by a downwardly revised 1.5 percent in July.

Personal spending was expected to increase by 0.8 percent compared to the 1.9 percent spike originally reported for the previous month.

The Institute for Supply Management also released a report unexpectedly showing a modest slowdown in the pace of growth in manufacturing activity in the month of September.

The ISM said its purchasing managers index edged down to 55.4 in September after rising to 56.0 in August. While a reading above 50 still indicates growth in the manufacturing sector, economists had expected the index to inch up to 56.3.

Sector News

Retail stocks have shown a strong move to the upside over the course of the session, with the Dow Jones U.S. Retail Index climbing by 1.5 percent.

Considerable strength has also emerged among gold stocks, as reflected by the 1.2 percent advance by the NYSE Arca Gold Bugs Index.

The strength in the gold stocks comes amid a sharp increase by the price of the precious metal, with gold for December delivery jumping $19.60 to $1,915.10 an ounce.

Semiconductor, utilities and airline stocks are also seeing notable strength in mid-day trading, while substantial weakness remains visible among energy stocks.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 3.6 percent, the NYSE Arca Oil Index is down by 3.4 percent, and the NYSE Arca Natural Gas Index is down by 2 percent.

The sell-off by energy stocks comes amid a steep drop by the price of crude oil, with crude for November delivery plunging $2.14 to $38.08 a barrel.

Other Markets

In overseas trading, the Tokyo Stock Exchange halted trading on Thursday due to a technical issue, while markets in China, Hong Kong, South Korea and Taiwan were closed for holidays. Australia’s S&P/ASX 200 Index jumped by 1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index dipped by 0.2 percent, the U.K.’s FTSE 100 Index edged up by 0.2 percent and the French CAC 40 Index rose by 0.4 percent.

In the bond market, treasuries have climbed back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 0.684 percent.

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