U.S. stocks extended a recent rally as equities shrugged off the persisting government shutdown, festering Brexit uncertainty and ongoing China concerns, aided by an upbeat jobless claims report and an unexpected jump in regional manufacturing activity.
Treasury yields finished mostly higher and the U.S. dollar was little changed, while gold and crude oil prices moved lower.
The Dow Jones Industrial Average gained 163 points (0.7%) to 24,370
The S&P 500 Index rose 20 points (0.8%) to 2,636
The Nasdaq Composite advanced 50 points (0.7%) to 7,084
In moderately-heavy volume, 914 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq
WTI crude oil lost $0.24 to $52.07 per barrel but wholesale gasoline ticked $0.01 higher to $1.43 per gallon
The Bloomberg gold spot price declined $1.59 to $1,292.08 per ounce
The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was little changed at 96.07
Jobless claims move lower, regional manufacturing surprisingly jumps
Weekly initial jobless claims decreased by 3,000 to 213,000, below the Bloomberg estimate of 220,000, with the prior week’s figure unrevised at 216,000. The four-week moving average dipped by 1,000 to 220,750, while continuing claims increased by 18,000 to 1,737,000, north of estimates of 1,734,000.
The Philly Fed Manufacturing Index unexpectedly showed growth (a reading above zero) accelerated, rising to 17.0 from 9.4 in December, compared to estimates of a dip to 9.0.
Treasuries were mostly lower, with the yield on the 2-year note rising 3 basis points to 2.57% and the yield on the 10-year note gaining 2 bps to 2.75%, while the 30-year bond rate was flat at 3.07%.
The economic calendar will close out the week tomorrow with another dose of manufacturing data and a timely read on consumer sentiment. The Fed will deliver its industrial production and capacity utilization report, with production projected to rise 0.2% month-over-month in December, after November’s solid 0.6% gain, while capacity utilization is expected to remain at 78.5%. The report will be followed by the preliminary January University of Michigan Consumer Sentiment Index, anticipated to drop to 96.8 from December’s 98.3 level.
Europe mostly lower, Asia mixed on Brexit developments, trade and China uneasiness
European equities finished mostly lower, weighed down by uncertainty over Brexit after the U.K. government lost its bid to pass an original divorce plan in the House of Commons on Tuesday, but endured a no-confidence vote in Parliament yesterday. Markets seemed to be expecting Westminster to move for an extension of Article 50—pushing back the March 29 Brexit deadline—as the possibility of a general election or a no-deal scenario appeared to fade slightly.
The British pound moved higher and the euro dipped versus the U.S. dollar, while bond yields in the region were mostly higher.
Chinese stocks moved lower even as the People’s Bank of China injected $83 billion of liquidity into its banking system ahead of a traditionally tight period before the Chinese New Year.
Japanese stocks dipped, with the yen gaining some ground on the U.S. dollar and markets still digesting yesterday’s disappointing read for core machine orders ahead of tomorrow’s December inflation report.