Tech Stocks Helping Lead Rebound On Wall Street

Stocks have moved mostly higher over the course of morning trading on Thursday, regaining some ground following the sell-off seen in the previous session. The major averages have all moved back to the upside, with the tech-heavy Nasdaq showing a notable advance.

Currently, the major averages are just off their highs of the session. The Dow is up 147.12 points or 0.6 percent at 26,667.07, the Nasdaq is up 134.90 points or 1.2 percent at 11,139.77 and the S&P 500 is up 32.49 points or 1 percent at 3,303.52.

The advance by the tech-heavy Nasdaq is partly being led by Facebook (FB), with the social media spiking by 4.4 percent ahead of the release of its third quarter results after the close of trading.

Tech giants Apple (AAPL), Alphabet (GOOGL) and Amazon (AMZN) are also moving higher ahead of the release of the quarterly results.

The strength on Wall Street also comes following the release of a report from the Commerce Department showing a stronger than expected rebound by the U.S. economy in the third quarter.

The Commerce Department said real gross domestic product skyrocketed by 33.1 percent in the third quarter after plunging by 31.4 percent in the second quarter. Economists had expected GDP to soar by 31.0 percent.

The substantial rebound in GDP came as consumer spending bounced back sharply, spiking by 40.7 percent in the third quarter after plummeting by 33.2 percent in the second quarter.

“Overall, the initial recovery in GDP after the first wave of lockdowns were lifted was stronger than we originally anticipated,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, “But, with coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower.”

Adding to the positive sentiment, the Labor Department released a report showing initial jobless claims fell to their lowest level since before the coronavirus-induced lockdowns in the week ended October 24th.

The report said initial jobless claims dropped to 751,000, a decrease of 40,000 from the previous week’s revised level of 791,000.

Economists had expected jobless claims to dip to 775,000 from the 787,000 originally reported for the previous week.

With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 282,000 in the week ended March 14th.

Meanwhile, the National Association of Realtors released a report showing pending home sales unexpectedly pulled back off a record high in the month of September.

NAR said its pending home sales index slumped by 2.2 percent to 130.0 in September after spiking by 8.8 percent to 132.9 in August. The drop came as a surprise to economists, who had expected pending home sales to jump by another 3.4 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Bargain hunting is also contributing to the rebound on Wall Street after the sell-off seen on Wednesday pulled the Dow down to a nearly three-month closing low. The Nasdaq and the S&P 500 also hit their lowest closing levels in over a month.

Airline stocks have moved sharply higher in morning trading, regaining ground after turning in some of the market’s worst performances in the previous session.

Reflecting the strength in the sector, the NYSE Arca Airline Index is jumping by 3 percent after ending Wednesday’s trading at a two-month closing low.

Significant strength is also visible among gold stocks, as reflected by the 2.2 percent gain being posted by the NYSE Arca Gold Bugs Index. The rebound comes despite a decrease by the price of gold.

Semiconductor, chemical and steel stocks are also seeing notable strength on the day following the broad based sell-off seen on Wednesday.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.4 percent, while Australia’s S&P/ASX 200 Index slumped by 1.6 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the German DAX Index has risen by 0.6 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 0.2 percent.

In the bond market, treasuries have moved modestly lower over the course of the morning. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2 basis points at 0.801 percent.

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