After moving in opposite directions early on Thursday, stocks moved mostly higher in reaction to the minutes of the latest Federal Reserve meeting. The gains on the day extended a recent upward trend, with the Dow and the S&P 500 reaching their best levels in well over a month.
The major averages closed firmly positive but off their highs for the session. The Dow climbed 138.46 points or 0.8 percent to 17,050.75, the Nasdaq rose 19.64 points or 0.4 percent to 4,810.79 and the S&P 500 advanced 17.60 points or 0.9 percent to 2,013.43.
The higher close on Wall Street came as traders reacted positively to the minutes of the Fed's September meeting, which further offset recent uncertainty about the outlook for interest rates.
While the minutes said members agreed the economic outlook had not been materially altered, the Fed decided it was prudent to wait for additional information before raising rates.
"Recent information on real U.S. economic activity was generally stronger than expected, but equity prices declined, the foreign exchange value of the dollar appreciated further, and indicators of foreign economic growth were generally weak," the minutes said.
Members also expressed concerns about below-target inflation, although most said the conditions for raising rates had been met or would likely be met by the end of the year.
The minutes combined with recent jobs and trade data have reinforced the view that the Fed will not raise rates later this month and may delay its first rate hike into next year.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Admittedly, there are still two employment reports scheduled for release before the FOMC meets in December."
"But at this stage we think it would take a major turnaround in payroll growth, to well above 200,000 per month, to persuade officials to support a December rate hike," he added.
Before the start of trading, the Labor Department released a report showing a bigger than expected pullback in initial jobless claims in the week ended October 3rd.
Sector News
Considerable strength emerged among energy stocks on the day, as reflected by the 2.6 percent gain posted by the NYSE Arca Oil & Gas Index. With the gain, the index reached a nearly two-month closing high.
The strength in the energy sector came amid a sharp increase by the price of crude oil, with crude for November delivery jumping $1.62 to $49.43 a barrel.
Steel stocks also showed a strong move to the upside, extending the upward trend seen over the past few sessions. The NYSE Arca Steel Index surged up by 2.5 percent, reaching its best closing level in well over a month.
Brazil's CSN (SID), Ryerson (RYI) and Cliffs Natural Resources (CLF) turned in some of the steel sector's best performances.
Railroad stocks also saw significant strength on the day, resulting in a 2.1 percent gain by the Dow Jones Railroads Index. American Railcar (ARII) led the sector higher, surging up by 19.4 percent.
Networking, computer hardware, and chemical stocks also turned in strong performances, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slumped by 1 percent, while China's Shanghai Composite Index surged up by 3 percent.
Meanwhile, the major European markets all moved higher on the day. While the U.K.'s FTSE 100 Index advanced by 0.6 percent, the German DAX Index and the French CAC 40 Index both edged up by 0.2 percent.
In the bond market, treasuries saw considerable volatility following the release of the Fed minutes before closing firmly in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.6 basis points to 2.108 percent.
Looking Ahead
Trading on Friday may be impacted by reaction to earnings news from Alcoa (AA), which is releasing its third quarter results after the close of today's trading.
The release of results from Alcoa is seen as the unofficial start of earning season, as the aluminum giant is typically the first major company to report its results.
On the U.S. economic front, traders are likely to keep an eye on reports on import and export prices and wholesale inventories.
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