Nasdaq Reaches Nearly Nine-Month High, Dow Posting Modest Gain

Stocks have moved mostly higher over the course of morning trading on Thursday, extending the rally seen in the previous session. The major averages have all moved to the upside, with the tech-heavy Nasdaq reaching its best intraday level in almost nine months.

Currently, the Nasdaq is up 101.37 points or 0.8 percent at 12,601.94 and the S&P 500 is up 17.93 points or 0.4 percent at 4,176.70. The narrower Dow is posting a more modest gain, up 24.95 points or 0.1 percent at 33,445.72.

Optimism lawmakers will eventually reach an agreement on raising the U.S. debt ceiling continues to contribute to strength on Wall Street.

Following a meeting earlier in the week, President Joe Biden and House Speaker Kevin McCarthy, R-Calif., both expressed optimism a deal will be reached.

A positive reaction to quarterly results from Walmart (WMT) has also generated some buying interest, with the retail giant jumping by 2.1 percent.

The advance by Walmart comes after the company reported better than expected first quarter results and raised its full-year guidance.

On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 13th.

The report said initial jobless claims slid to 242,000, a decrease of 22,000 from the previous week’s unrevised level of 264,000. Economists had expected jobless claims to dip to 254,000.

The bigger than expected drop came after jobless claims reached their highest level since the week ended October 30, 2021 in the previous week.

A separate report released by the Federal Reserve Bank of Philadelphia showed a continued contraction in regional manufacturing in the month of May, although the pace of contraction slowed by more than expected.

The Philly Fed said its diffusion index for current activity surged to a negative 10.4 in May from a negative 31.3 in April.

While a negative reading still indicates a contraction in regional manufacturing activity, economists had expected the index to show a more modest recovery to a negative 19.8.

The bigger than expected rebound came after the Philly Fed Index dropped to its lowest level since May 2020 in the previous month.

The National Association of Realtors also released a report unexpectedly showing a steep drop in U.S. existing home sales in the month of April.

NAR said existing home sales plunged by 3.4 percent to an annual rate of 4.28 million in April after tumbling by 2.6 percent to a revised rate of 4.43 million in March.

The extended pullback surprised economists, who had expected existing home sales to inch up by 0.1 percent compared to the 2.4 percent slump originally reported for the previous month.

Sector News

Semiconductor stocks are seeing substantial strength in morning trading, with the Philadelphia Semiconductor Index surging by 2.1 percent to its best intraday level in over a month.

Micron Technology (MU) is posting a standout gain after announcing plans to invest up to $3.6 billion to bring extreme ultraviolet (EUV) technology to Japan for production.

Considerable strength has also emerged among computer hardware stocks, as reflected by the 1.9 percent jump by the NYSE Arca Computer Hardware Index. The advance has lifted the index to a one-year high.

Retail stocks are also turning in a strong performance following Walmart’s upbeat results, driving the Dow Jones U.S. Retail Index up by 1.4 percent.

On the other hand, gold stocks have moved sharply lower on the day, dragging the NYSE Arca Gold Bugs Index down by 3.2 percent.

The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, with gold for June delivery tumbling $25.90 to $1,959 an ounce.

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 1.6 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has jumped by 1.2 percent, the French CAC 40 Index is up by 0.6 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent.

In the bond market, treasuries are moving lower for the fifth consecutive session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.3 basis points at 3.634 percent.

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