U.S. Stocks Extend Substantial Rebound From Recent Lows

Stocks showed a lack of direction early in the session on Thursday but climbed firmly into positive territory over the course of the trading day. The major averages showed strong moves to the upside after bouncing back and forth across the unchanged line in early trading.

The major averages ended the day just off their highs of the session. The Dow surged 417.66 points or 1.2 percent to 34,480.76, the Nasdaq shot up 178.23 points or 1.3 percent to 13,614.78 and the S&P 500 jumped 53.81 points or 1.2 percent to 4,411.67.

The strength that emerged on Wall Street may partly reflect recent upward momentum, with the major averages extending the rally seen over the two previous sessions.

The rebound has helped lift stocks well off their recent lows, although they remain at relatively reduced levels compared to their record highs.

Meanwhile, traders seem shrugged off recent comments from a Kremlin spokesman pouring cold water on reports of “significant progress” in peace talks.

“On the whole, that’s wrong,” Kremlin spokesman Dmitry Peskov said when asked about a Financial Times report on progress toward a deal, according to Bloomberg News.

The markets also continued to digest the Federal Reserve’s decision to raise interest rates for the first time since December 2018 on Wednesday.

The Fed raised rates by 25 basis points to 0.25 to 0.5 percent and signaled several more rate hikes are likely over the coming months.

On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended March 12th.

The Labor Department said initial jobless claims dipped to 214,000, a decrease of 15,000 from the previous week’s revised level of 229,000.

Economists had expected jobless claims to edge down to 220,000 from the 227,000 originally reported for the previous week.

A separate report from the Commerce Department showed housing starts rebounded by much more than expected in the month of February.

The report showed housing starts spiked by 6.8 percent to an annual rate of 1.769 million in February after plunging by 5.5 percent to a revised rate of 1.657 million in January.

Economists had expected housing starts to jump by 3.2 percent to a rate of 1.690 million from the 1.638 million originally reported for the previous month.

With the much bigger than expected increase, housing starts reached their highest annual rate since hitting 1.802 million in June of 2006.

Meanwhile, the report showed building permits slumped by 1.9 percent to an annual rate of 1.859 million in February after rising by 0.5 percent to a revised rate of 1.895 million in January.

Building permits, an indicator of future housing demand, had been expected to tumble by 2.6 percent to a rate of 1.850 million from the 1.899 million originally reported for the previous month.

The Fed also released a report showing industrial production in the U.S. increased in line with economist estimates in the month of February.

Sector News

Energy stocks moved sharply higher following recent weakness, rebounding along with the price of crude oil. Crude for April delivery soared $7.94 to $102.98 a barrel after plunging over the three previous sessions.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 4.6 percent, the NYSE Arca Oil Index surged by 3.8 percent and the NYSE Arca Natural Gas Index jumped by 2.9 percent.

Steel stocks also turned in a strong performance amid indications China plans to take steps to boost is economy, driving the NYSE Arca Steel Index up by 3.2 percent.

Substantial strength was also visible among gold stocks, which rebounded along with the price of the precious metal. With gold for April delivery surging $34 to $1,943.20, the NYSE Arca Gold Bugs Index advanced by 2.3 percent.

Biotechnology, chemical and tobacco stocks also saw considerable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Thursday. Japan’s Nikkei 225 Index spiked by 3.5 percent, while Hong Kong’s Hang Seng Index skyrocketed by 7 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index fell by 0.4 percent, the French CAC 40 Index rose by 0.4 percent and the U.K.’s FTSE 100 Index jumped by 1.3 percent.

In the bond market, treasuries rebounded early in the session but pulled back near the unchanged line as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.192 percent.

Looking Ahead

Reports on existing home sales and leading economic indicators may attract attention on Friday, while traders also likely to keep an eye on the latest developments in the Russia-Ukraine conflict.

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