U.S. Stocks Extending Fed-Inspired Rally, Dow Reaches New Record High

Stocks have moved mostly higher over the course of the trading day on Thursday, extending the rally seen late in the previous session. With the continued upward move, the Dow has once again reached a new record intraday high.

Currently, the Dow is just off its highs of the session, up 162.86 points or 0.4 percent at 37,253.10. The Nasdaq is up 61.73 points or 0.4 percent at 14,795.69 and the S&P 500 is up 25.58 points or 0.5 percent at 4,732.67.

Stocks continue to benefit from a positive reaction to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed left interest rates unchanged, as widely expected, and signaled plans to cut interest rates three times next year.

Since the Fed’s projections are often more conservative, traders are expecting the central bank to slash rates even further than forecast in 2024.

Adding to optimism the economy is headed toward a soft landing, the Commerce Department released a report this morning showing an unexpected increase in U.S. retail sales in November.

The Commerce Department said retail sales rose by 0.3 percent in November after slipping by a downwardly revised 0.2 percent.

Economists had expected retail sales to edge down by 0.1 percent, matching the dip originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales inched up by 0.2 percent in November after coming in unchanged in October. Ex-auto sales were expected to slip by 0.1 percent.

Meanwhile, the Labor Department released a separate report showing first-time claims for U.S. unemployment benefits unexpectedly decreased in the week ended December 9th.

The report said initial jobless claims fell to 202,000, a decrease of 19,000 from the previous week’s revised level of 221,000.

Economists had expected jobless claims to come in unchanged compared to the 220,000 originally reported for the previous week.

Sector News

Banking stocks are seeing substantial strength on the day, with the KBW Bank Index soaring by 5.1 percent to its best intraday level in nine months.

Significant strength is also visible among housing stocks, as reflected by the 5.0 percent surge by the Philadelphia Housing Sector Index. The index has reached a record intraday high.

Oil energy stocks are also seeing considerable strength amid a sharp increase by the price of crude oil, driving the Philadelphia Oil Service Index up by 4.4 percent.

Commercial real estate, brokerage and gold stocks have also moved sharply higher, while software stocks are among the few groups bucking the uptrend.

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 shed 0.7 percent, while Hong Kong’s Hang Seng Index jumped by 1.1 percent.

Meanwhile, European stocks moved mostly higher on the day. The U.K.’s FTSE 100 Index surged by 1.3 percent and the French CAC 40 Index climbed by 0.6 percent, although the German DAX Index bucked the uptrend and edged down by 0.1 percent.

In the bond market, treasuries are extending the substantial rally seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 13.6 basis points at 3.897 percent.

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