U.S. Stocks Rally To Record Highs Amid Positive Reaction To Data

(RTTNews) - Stocks showed a strong move to the upside during trading on Thursday, with the major averages all moving notably higher following the mixed performance seen during Wednesday's session. With the upward move, the major averages all reached new record closing highs.

The major averages finished the session just off their best levels of the day. The Dow surged 617.08 points or 1.4 percent to 46,108.00, the S&P 500 jumped 55.43 points or 0.9 percent to 6,587.47 and the Nasdaq advanced 157.01 points or 0.7 percent to 22,043.07.

The strength on Wall Street came amid a positive reaction to separate Labor Department reports on consumer price inflation and weekly jobless claims.

A closely watched Labor Department report showed U.S. consumer prices rose by slightly more than expected in the month of August.

The Labor Department said its consumer price index climbed by 0.4 percent in August after inching up by 0.2 percent in July. Economists had expected consumer prices to rise by 0.3 percent.

The report also said the annual rate of consumer price growth accelerated to 2.9 percent in August from 2.7 percent in July, in line with economist estimates.

Meanwhile, the Labor Department said core consumer prices, which exclude food and energy prices, rose by 0.3 percent in August, matching the increase seen in July as well as expectations.

The annual rate of core consumer price growth in August was unchanged from the previous month at 3.1 percent, in line with economist estimates.

The Labor Department also released a report showing first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended September 6th.

The report said initial jobless claims climbed to 263,000, an increase of 27,000 from the previous week's revised level of 236,000. Economists had expected jobless claims to edge down to 235,000 from the 237,000 originally reported for the previous week.

With the unexpected increase, jobless claims reached their highest level since hitting 268,000 in the week ended October 23, 2021.

While consumer prices rose slightly faster than expected on a monthly basis, the annual growth in line with estimates along with signs of weakness in the labor market added to recent optimism about the outlook for interest rates.

Following the reports, CME Group's FedWatch Tool is currently indicating 94.8 percent chance the Federal Reserve will lower rates by a quarter-point next week and a slim 5.2 percent chance of a half- point rate cut.

Sector News

Computer hardware stocks turned in some of the market's best performances on the day, with the NYSE Arca Computer Hardware Index surging by 2.7 percent to a record closing high.

Substantial strength was also visible among networking stocks, as reflected by the 2.7 percent jump by the NYSE Arca Networking Index. The index also reached a new record closing high.

Biotechnology stocks also showed a significant move to the upside, driving the NYSE Arca Biotechnology Index up by 2.6 percent.

Housing, telecom and airline stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock market across the Asia-Pacific region turned in a mixed performance on Thursday. Japan's Nikkei 225 Index jumped by 1.2 percent and China's Shanghai Composite Index surged by 1.7 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index rose by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.8 percent.

In the bond market, treasuries moved modestly higher, extending the upward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.1 basis points to a five-month closing low of 4.011 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to the University of Michigan's preliminary report on consumer sentiment in the month of September, which includes reading on consumers' inflation expectations.