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Trading has been relatively subdued in recent weeks, with traders staying on the sidelines as economists forecast that the economy will see a recovery near the end of the calendar year.
The day's buying interest was largely generated by a report from the Labor Department showed that first-time claims for unemployment benefits decreased substantially in the week ended July 4th.
The report showed that jobless claims fell to 565,000 from the previous week's revised figure of 617,000. Economists had been expecting a more modest decrease to 603,000 from the 614,000 originally reported for the previous week.
With the bigger than expected decrease, weekly jobless claims fell below the 600,000 level for the first time since January.
However, the report also showed that continuing claims, which measure the number of people continuing to claim unemployment benefits, rose to 6.883 million in the week ended June 27th. The increase lifted continuing claims to a new record high.
Traders largely shrugged off May wholesale trade data from the Commerce Department, which showed that wholesale inventories fell by less than economists had been expecting. The report also showed a modest increase in wholesale sales.
Dow component Alcoa (AA | Quote | Chart | News | PowerRating) unofficially kicked off the start of the earnings season after the closing bell yesterday, reporting at narrower loss than Wall Street analysts had been expecting.
While the Dow bounced back and forth across the unchanged line going into the close, the blue chip index managed to end the session up by 4.76 points or 0.1 percent at 8,183.17, the Nasdaq rose by 5.38 points or 0.3 percent to 1,752.55 and the S&P 500 finished up by 3.12 points or 0.4 percent at 882.68.
Sector News
Semiconductor stocks turned in some of the day's best performances, with the Philadelphia Semiconductor Sector Index posting a 2.8 percent gain on the session. With the move, the index bounced well off the nearly seven-week closing low set in the previous session.
Resource stocks also moved higher, recovering from their recent pullback. Strong gains were visible among natural gas, steel and oil service stocks.
Housing and banking stocks also posted notable gains, with the Philadelphia Housing Sector Index and the Kbw Bank Index climbing by 2.7 percent and 1.9 percent, respectively. With the gains, the indices bounced off the roughly two-month closing lows set on Wednesday.
While brokerage, internet and telecommunications stocks also showed strong moves to the upside, weakness was visible among commercial real estate stocks. The Morgan Stanley REIT Index fell by 1.6 percent on the day, falling to its worst closing level in well over two months.
Further, as healthcare reform continues to be a hot topic in Washington, healthcare related stocks pulled back by modest margins on the day. The Morgan Stanley Healthcare Provider Index and the NYSE Arca Pharmaceutical Index fell by 0.9 percent and 0.7 percent, respectively.
Dow Components
A slim majority of the Dow components ended the day in positive territory, contributing to the modest gain posted by the blue chip index.
The Dow was helped higher by shares of JP Morgan Chase (JPM | Quote | Chart | News | PowerRating), which advanced 2.8 percent on the day. The stock was able to continue its move off the four-month lows set in early July.
Further, shares of diversified conglomerate General Electric (GE | Quote | Chart | News | PowerRating) also rose, moving up by 1.4 percent on the day. The climb helped the stock move up off the three-month closing low set in the previous session.
IBM Corp. (IBM | Quote | Chart | News | PowerRating), DuPont (DD | Quote | Chart | News | PowerRating), and Disney (DIS | Quote | Chart | News | PowerRating) also posted notable gains, moving off of comparable multi-month lows set following the widespread retreat in equities on Tuesday.
On the other hand, shares of Merck (MRK | Quote | Chart | News | PowerRating) and Alcoa (AA | Quote | Chart | News | PowerRating) closed down by 3.7 percent and 2.4 percent, respectively, helping to limit the gain by the Dow. Pfizer (PFE | Quote | Chart | News | PowerRating) also dropped, slipping by 2.2 percent and setting a roughly three-week closing low.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region ended Thursday's session on a mixed note. Japan's benchmark Nikkei 225 Index closed down by 1.4 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent on the day.
Meanwhile, the major European markets all closed on the upside, with the German DAX Index closing up by 1.3 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 Index both rose by 0.5 percent.
In the bond markets, treasuries plunged following the release of the better-than-expected employment figures. Subsequently, the yield on the benchmark ten-year note finished at 3.413 percent, rising by 12.4 basis points on the day.
Looking Ahead
Aside from reacting to earnings from Chevron (CVX | Quote | Chart | News | PowerRating), traders will also be presented with trade balance figures from the Commerce Department on Friday. Economists expect the trade deficit to deepen to $30.0 billion in May from $29.2 billion in April. The report is due out at 8:30 a.m. ET.
Shortly after the opening bell on Wall Street, market focus is likely to turn to the Reuters/University of Michigan's preliminary reading on consumer sentiment in July. Analysts expect the index to edge down to 70.3 from a final reading of 70.8 in June.
The dip is expected to come as largely disappointing employment data seen in recent weeks has deflated the economic outlook.
Further, Treasury Secretary Tim Geithner is set to testify before a joint hearing of House Financial Services and Agriculture Committees regarding derivatives regulation. The hearing is set to begin at 10 a.m. ET.
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