U.S. Stocks Move Back To The Upside Ahead Of Thanksgiving Day Holiday

Following the pullback seen during the previous session, stocks moved back to the upside during trading on Wednesday. The major averages gave back ground after an early surge but managed to remain in positive territory.

The Dow advanced 184.74 points or 0.5 percent to35,273.03 and the S&P 500 climbed 18.43 points or 0.4 percent to 4,556.62, reaching their best closing levels in over three months, while the Nasdaq rose 65.88 points or 0.5 percent to 14,265.86.

The strength on Wall Street came as continued optimism about the outlook for interest rates contributed to renewed buying interest following the pullback on Tuesday.

While the minutes of the latest Federal Reserve meeting failed to provide any indications the central bank plans to cut interest rates in the near future, CME Group’s FedWatch Tool still suggests the next move will be a rate cut in mid-2024.

Stocks may also have benefitted from easing concerns about the conflict in the Middle East after Hamas and Israel agreed to a Qatar-mediated pause in fighting.

Trading activity was somewhat subdued, however, as some traders looked to get a head start on the Thanksgiving Day holiday on Thursday.

On the U.S. economic front, the Labor Department released a report showing first-time claims for unemployment benefits fell by more than expected in the week ended November 18th.

The report said initial jobless claims fell to 209,000, a decrease of 24,000 from the previous week’s revised level of 233,000.

Economists had expected jobless claims to dip to 225,000 from the 231,000 originally reported for the previous week.

A separate report released by the Commerce Department showed new orders for U.S. manufactured durable goods pulled back by much more than expected in the month of October.

The Commerce Department said durable goods orders plunged by 5.4 percent in October after surging by 4.6 percent in September. Economists had expected durable goods orders to tumble by 3.1 percent.

The sharp pullback in durable goods orders came as orders for transportation equipment plummeted by 14.8 percent in October after spiking by 11.6 percent in September.

Excluding the steep drop in orders for transportation equipment, durable goods orders were virtually unchanged in October after edging up by 0.2 percent in September. Ex-transportation orders were expected to inch up by 0.1 percent.

The University of Michigan also released revised data showing consumer sentiment in the U.S. deteriorated by less than previously estimated in the month of November

The University of Michigan said its consumer sentiment index for November was upwardly revised to 61.3 from a preliminary reading of 60.4. The upwardly revised reading is well above economist estimates for 60.5 but is still down from 63.8 in October.

Sector News

Retail stocks saw considerable strength on the day, with the Dow Jones U.S. Retail Index climbing by 1.1 percent to its best closing level in well over a year.

Notable strength was also visible among airline stocks, as reflected by the 1.0 percent gain posted by the NYSE Arca Airline Index.

Networking and software stocks also saw some strength, while most of the other major sectors showed more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index fell by 0.8 percent.

The major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index dipped by 0.2 percent, the German DAX Index and the French CAC 40 Index both climbed by 0.4 percent.

In the bond market, treasuries pulled back near the unchanged line after an early move to the upside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day down by less than a basis point at 4.416 percent.

Looking Ahead

Following the Thanksgiving Day holiday on Thursday, trading activity is likely to be subdued on Friday amid a shortened session on Wall Street.

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