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Stocks Move Mostly Higher Amid Optimism About Trade - U.S. Commentary

RTTNews 2018-09-13 10:29:00

Stocks have moved mostly higher in morning trading on Thursday after ending the previous session roughly flat. Following the mixed performance seen on Wednesday, the major averages have all moved to the upside on the day.

In recent trading, the major averages have pulled back off their highs of the session. The Dow is up 125.90 points or 0.5 percent at 26,124.82, the Nasdaq is up 51.05 points or 0.6 percent at 8,005.28 and the S&P 500 is up 11.94 points or 0.4 percent at 2,900.86.

The strength on Wall Street partly reflects optimism about trade following recent reports the U.S. is proposing a new round of trade talks with China in the near future.

U.S. Treasury Secretary Steven Mnuchin has reportedly sent an invitation for talks to senior Chinese officials, proposing a meeting in the next few weeks.

Traders have also reacted positively to a report from the Labor Department showing consumer prices rose by less than expected in the month of August.

The Labor Department said its consumer price index rose by 0.2 percent in August, matching the increase seen in July. Economists had expected prices to climb by 0.3 percent.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in August after rising by 0.2 percent for three straight months. Core prices had been expected to show another 0.2 percent increase.

The report also said the annual rate of consumer price growth slowed to 2.7 percent in August from 2.9 percent in July.

Core consumer prices were up by 2.2 percent year-over-year in August compared to the 2.4 percent increase in the previous month.

"There is no reason to suspect that the weaker increase in consumer prices in August is the start of another dip like we saw in early 2017," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, "With labor market conditions tight, wage growth accelerating and input prices being pushed up by capacity constraints and recently imposed tariffs, there is plenty of upward pressure on prices."

A separate report from the Labor Department unexpectedly showed a slight drop in initial jobless claims in the week ended September 8th.

The report said initial jobless claims dipped to 204,000, a decrease of 1,000 from the previous week's revised level of 205,000.

Economists had expected jobless claims to rise to 210,000 from the 203,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level since hitting 202,000 in December of 1969.

Telecom stocks have shown a significant move to the upside on the day, driving the NYSE Arca Telecom Index up by 2.2 percent. With the jump, the index has reached its best intraday level in four years.

Considerable strength is also visible among semiconductor stocks, as reflected by the 1.6 percent gain being posted by the Philadelphia Semiconductor Index.

On the other hand, weakness among tobacco, natural gas and housing stocks is limiting the upside by the broader markets.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index soared by 2.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index is down by 0.2 percent, the French CAC 40 Index and the German DAX Index are up by 0.4 percent and 0.6 percent, respectively.

In the bond market, treasuries are showing a lack of direction after ending the previous session modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.968 percent.

by RTTNews Staff Writer

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