After coming under pressure early in the session, stocks have shown a significant turnaround over the course of the trading day on Thursday. The major averages have climbed well off their early lows and firmly into positive territory.
Currently, the major averages are hovering near their best levels of the day. The Dow is up 236.41 points or 0.7 percent at 32,434.00, the Nasdaq is up 51.46 points or 0.4 percent at 12,083.89 and the S&P 500 is up 30.41 points or 0.8 percent at 4,054.02.
The major averages are extending the rally seen during Wednesday’s trading, reaching their best intraday levels in well over a month.
The early weakness on Wall Street came following the release of a Commerce Department report showing a continued contraction in U.S. economic activity in the second quarter of 2022.
The Commerce Department said real gross domestic product decreased by 0.9 percent in the second quarter after slumping by 1.6 percent in the first quarter. Economists had expected GDP to increase by 0.5 percent.
With GDP unexpectedly declining for the second consecutive quarter, the data signals the U.S. economy is in a technical recession.
However, economists cast doubt on whether the economy is actually in a recession, citing other indicators indicating continued growth and persistent strength in the labor market.
The data may have still added to optimism that the Federal Reserve will slow the pace of its interest rate hikes at future meetings, contributing to the turnaround on Wall Street.
Despite the rebound by the broader markets, Meta Platforms (META) continues to post a steep loss after the parent of Facebook and Instagram reported weaker than expected second quarter results, including its first ever year-over-year drop in revenues.
Networking stocks are extending the strong upward move seen in the previous session, driving the NYSE Arca Networking Index up by 3.6 percent to its best intraday level in well over two months.
Substantial strength has also emerged among gold stocks, as reflected by the 3.4 percent spike by the NYSE Arca Gold Bugs Index.
The rally by gold stocks comes amid a notable increase by the price of the precious metal, with gold for August delivery jumping $32.60 to $1,751.70 an ounce.
Interest rate-sensitive commercial real estate and utilities stocks are also seeing considerable strength on the day, moving higher along with transportation, chemical and steel stocks.
Meanwhile, oil service stocks have climbed off their worst levels but remain firmly negative amid a modest decrease by the price of crude oil.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index edged up by 0.2 percent.
Most European stocks also moved to the upside over the course of the session. While the U.K.’s FTSE 100 Index closed just below the unchanged line, the German DAX Index advanced by 0.9 percent and the French CAC 40 Index jumped by 1.3 percent.
In the bond market, treasuries have pulled back off their early highs but remain in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4 basis points at 2.694 percent.
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