U.S. Stocks Pull Back Off Best Levels But Remain Mostly Positive

After moving sharply higher early in the session, stocks have given back some ground over the course of the trading day on Thursday. The major averages have pulled back off their highs of the session but remain firmly positive.

The tech-heavy Nasdaq is posting a standout gain, jumping 185.99 points or 1.6 percent to 11,855.95. The S&P 500 is also up 34.82 points or 0.9 percent at 3,971.79, while the narrower Dow is up 181.15 points or 0.6 percent at 32,211.26.

The early rally on Wall Street came as traders continued to react to yesterday’s monetary policy announcement by the Federal Reserve.

While some traders were initially disappointed the Fed decided to continue raising rates despite recent banking industry turmoil, indications the central bank is nearing the end of its tightening cycle generated some buying interest.

The latest projections suggest the Fed plans just one more quarter-point rate increase this year, with CME Group’s FedWatch Tool currently indicating a 33.8 percent chance the rate hike will come in May and a 66.2 percent chance rates will remain unchanged.

Even if the Fed raises rates again at its next meeting, traders may take some comfort in knowing officials feel a range of 5.0 to 5.25 percent will be the so-called “terminal rate.”

Buying interest has waned somewhat over the course of the session, however, as concerns about the recent trouble in the banking sector continue to hang over the markets.

In U.S. economic news, a report released by the Labor Department unexpectedly showed a slight decrease by first-time claims for U.S. unemployment benefits in the week ended March 18th.

The Labor Department said initial jobless claims slipped to 191,000, a decrease of 1,000 from the previous week’s unrevised level of 192,000. Economists had expected jobless claims to rise to 201,000.

The report said the less volatile four-week moving average also edged down to 196,250, a decrease of 250 from the previous week’s unrevised average of 196,500.

The Commerce Department also released a report showing new home sales in the U.S. increased from a significantly downwardly revised level in the month of February.

The report said new home sales climbed by 1.1 percent to an annual rate of 640,000 in February after jumping by 1.8 percent to a downwardly revised rate of 633,000 in January.

Economists had expected new home sales to pull back to an annual rate of 645,000 from the 670,000 originally reported for the previous month.

Sector News

Semiconductor stocks continue to see substantial strength in afternoon trading, resulting in a 3.2 percent surge by the Philadelphia Semiconductor Index. The index remains on pace to end the session at its best closing level in almost a year.

Considerable strength also remains visible among gold stocks, as reflected by the 2.6 percent jump by the NYSE Arca Gold Bugs Index.

The strength in the gold sector comes as the price of gold for April delivery is spiking $46.10 or 2.4 percent to $1,995.70 an ounce.

Software stocks have also shown a strong move to the upside on the day, driving the Dow Jones U.S. Software Index up by 2.4 percent.

Computer hardware and housing stocks also continue to see notable strength, while airline and oil service stocks have come under pressure over the course of the session.

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 edged down by 0.2 percent, while China’s Shanghai Composite Index climbed by 0.6 percent.

The major European markets also finished the day mixed. While the French CAC 40 Index inched up by 0.1 percent, the German DAX Index closed just below the unchanged line and the U.K.’s FTSE 100 Index slid by 0.9 percent.

In the bond market, treasuries are extending the strong upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.7 basis points at 3.453 percent.

Source: Read Full Article