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U.S. Stocks Move To The Upside As Treasury Yields Give Back Ground

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September 28 2023 12:42PM

After ending Wednesday’s volatile session narrowly mixed, stocks moved mostly higher during trading on Thursday. The major averages all moved to the upside on the day, with the tech-heavy Nasdaq leading the advance.

While the Nasdaq climbed 108.42 points or 0.8 percent to 13,201.28, the S&P 500 increased 25.19 points or 0.6 percent to 4,299.70 and the Dow rose 116.07 points or 0.4 percent to 33,666.34.

The strength on Wall Street partly reflected bargain hunting, as traders picked up stocks at reduced levels following recent weakness.

Concerns about the outlook for interest rates have weighed on the markets in recent session, dragging the major averages down to their lowest levels in three months.

A downturn by treasury yields also contributed to the strength among stocks, with the yield on the benchmark ten-year note giving back ground after reaching its highest levels since October 2007.

Meanwhile, traders were also looking ahead to remarks by Federal Reserve Chair Jerome Powell, which kicked off just as the markets close.

Powell is hosting a town hall with educators in Washington, D.C. and nationwide via webcast, with the Fed chief set to respond to questions from the in-person audience and virtual participants from across the country.

On the economic front, the Commerce Department released a report this morning showing the pace of U.S. economic growth in the second quarter of 2023 was unrevised from the previous estimate.

The Commerce Department said real gross domestic product increased by 2.1 percent in the second quarter, unrevised from the estimate provided last month. The unrevised reading matched economist estimates.

The unrevised GDP growth in the second quarter still reflects a slight slowdown compared to the 2.2 percent growth in the first quarter.

A separate report released by the Labor Department showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended September 23rd.

The Labor Department said initial jobless claims crept up to 204,000, an increase of 2,000 from the previous week’s revised level of 202,000.

Economists had expected jobless claims to rise to 215,000 from the 201,000 originally reported for the previous week.

Sector News

Semiconductor stocks showed a strong move to the upside on the day, driving the Philadelphia Semiconductor Index up by 1.8 percent. The index climbed further off their four-month closing low set on Tuesday.

Considerable strength was also visible among computer hardware stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Computer Hardware Index.

Networking, housing and brokerage stocks also saw notable strength, while interest rate-sensitive utilities stocks saw further downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. Japan’s Nikkei 225 Index and Hong Kong’s Hang Seng Index tumbled by 1.5 percent and 1.4 percent, respectively, while China’s Shanghai Composite Index and South Korea’s Kospi both inched up by 0.1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index crept up by 0.1 percent, the French CAC 40 Index climbed by 0.6 percent and the German DAX Index advanced by 0.7 percent.

In the bond market, treasuries showed a significant turnaround after coming under pressure in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 2.9 basis points to 4.597 percent.

Looking Ahead

Reaction to Powell’s remarks are likely to impact trading on Friday along with a report on personal income and spending that includes readings on inflation said to be preferred by the Fed.

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