After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Thursday. The major averages all bounced well off their lows of the session and into positive territory.
The tech-heavy Nasdaq showed a substantial recovery, ending the day up 15.79 points or 0.1 percent at 12,977.68 after tumbling by as much as 1.4 percent. The Dow also climbed 199.42 points or 0.6 percent to 32,619.48 and the S&P 500 rose 20.38 points or 0.5 percent to 3,909.52.
The turnaround on Wall Street seemed to reflect optimism about the U.S. economy reopening after President Joe Biden announced a new goal of administering 200 million coronavirus vaccinations within his first 100 days in office.
The new goal is double the 100 million shots in 100 days that Biden initially pledged and was reached before his 60th day in office.
“I know it’s ambitious, twice our original goal. But no other country in the world has even come close, not even close to what we are doing. I believe we can do it,” Biden told reporters at his first official press conference as president.
According to the Centers for Disease Control and Prevention, 133 million Covid vaccines have been administered, with more than 14 percent of the population fully vaccinated.
The weakness seen earlier in the day partly reflected renewed concerns about the outlook for monetary policy following comments from Federal Reserve Chair Jerome Powell.
In an interview on National Public Radio’s “Morning Edition,” Powell noted accelerated coronavirus vaccine distribution combined with support from Congress will enable the U.S. to reopen the economy sooner than might have been expected.
Powell also said the Fed plans to gradually roll back its asset purchases as the economy makes substantial progress towards the Fed’s goals of maximum employment and price stability.
While Powell stressed the pullback in support will only come when the “economy has all but fully recovered,” the comments still seemed to spook investors.
However, investors may have been calmed by the lack of response by the bond markets, with the yield on the benchmark ten-year note ending the day unchanged.
On the U.S. economic front, the Labor Department released a report showing initial jobless claims fell to their lowest level since the early days of the pandemic.
The report said initial jobless claims slid to 684,000 in the week ended March 20th, a decrease of 97,000 from the previous week’s revised level of 781,000.
Economists had expected jobless claims to decline to 730,000 from the 770,000 originally reported for the previous week.
With the much bigger than expected decrease, jobless claims dropped to their lowest level since hitting 282,000 in the week ended March 14, 2020.
A separate report from the Commerce Department showed economic activity in the U.S. unexpectedly grew faster than previously estimated in the fourth quarter of 2020.
The report showed real gross domestic product surged up by 4.3 percent in the fourth quarter compared to the previously reported 4.1 percent jump. Economists had expected the pace of GDP growth to be unrevised.
Airline stocks showed a substantial move back to the upside after falling sharply in recent sessions, with the NYSE Arca Airline Index soaring by 3.8 percent. The index bounced off its lowest closing level in over a month.
Considerable strength also emerged among housing stocks, as reflected by the 3.1 percent spike by the Philadelphia Housing Sector Index.
Shares of KB Home (KBH) showed a notable turnaround after initially coming under pressure following the release of mixed quarterly results.
Banking stocks also moved significantly higher over the course of the session, resulting in a 2.8 percent jump by the KBW Bank Index.
Networking, biotechnology and natural gas stocks also saw notable strength on the day, while some weakness remained visible among gold and software stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index jumped by 1.1 percent, while China’s Shanghai Composite Index slipped by 0.1 percent.
The major European markets also ended the day mixed. While the U.K.’s FTSE 100 Index fell by 0.6 percent, the French CAC 40 Index and the German DAX Index both inched up by 0.1 percent.
In the bond market, treasuries showed a lack of direction before ending the day flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, closed unchanged at 1.614 percent.
Trading on Friday may be impacted by reaction to reports on personal income and spending and consumer sentiment.
Source: Read Full Article