(RTTNews) - After moving sharply higher early in the session, stocks continue to see significant strength in mid-day trading on Thursday. The major averages reversed direction from their initial moves in each of the two previous sessions but have managed to remain firmly positive today.
In recent trading, the Dow and the S&P 500 have reached new highs for the session. The Dow is up 332.32 points or 1.3 percent at 26,368.42, the Nasdaq is up 117.25 points or 1.5 percent at 7,974.13 and the S&P 500 is up 36.42 points or 1.3 percent at 2,924.36.
The initial strength on Wall Street came on the heels of indications China is seeking to de-escalate the trade war with the U.S.
Chinese Ministry of Commerce spokesman Gao Feng indicated China does not currently intend to retaliate against President Donald Trump's latest threat to raise the rate of tariffs on Chinese imports.
"We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with calm attitude," Gao said, according to a CNBC translation.
Gao claimed China has plenty of countermeasures it could impose but will instead focus on removing Trump's new tariffs, which were announced after China said it plans to impose tariffs on $75 billion worth of U.S. goods.
"The most important thing at the moment is to create necessary conditions for both sides to continue negotiations," Gao told reporters during a weekly briefing.
Trump later told Fox News the U.S. and China are scheduled to hold talks later today at a "different level," although he did not clarify what that means.
On the U.S. economic front, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended August 24th.
The report said initial jobless claims inched up to 215,000, an increase of 4,000 from the previous week's revised level of 211,000.
Economists had expected jobless claims to climb to 215,000 from the 209,000 originally reported for the previous week.
A separate report released by the Commerce Department showed the pace of growth in U.S. economic activity slowed by slightly more than initially estimated in the second quarter.
The Commerce Department said gross domestic product increased by 2.0 percent in the second quarter compared to the previously reported 2.1 percent growth. The downward revision came in line with economist estimates.
The downwardly revised GDP growth seen in the second quarter compares to the 3.1 percent jump in GDP reported for the first quarter.
Meanwhile, the National Association of Realtors also released a report showing a sharp pullback in pending home sales in the month of July.
NAR said its pending home sales index tumbled by 2.5 percent to 105.6 in July after surging up by 2.8 percent to 108.3 in June. The steep drop came as a surprise to economists, who had expected pending sales to come in unchanged.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Extending the rally seen in the previous session, energy stocks are seeing further upside amid a continued increase by the price of crude oil.
Crude for October delivery is rising another $0.85 to $56.63 a barrel after climbing $0.85 to $55.78 a barrel on Wednesday following the release of a report showing a steep weekly drop in crude oil inventories.
Oil service stocks are posting particularly strong gains, with the Philadelphia Oil Service Index spiking by 3.2 percent, bouncing further off the eighteen-year closing low set on Tuesday.
Significant strength has also emerged among semiconductor stocks, as reflected by the 2.5 percent jump by the Philadelphia Semiconductor Index.
Optimism about a potential de-escalation in the U.S.-China trade war has also contributed to considerable strength among steel stocks, with the NYSE Arca Steel Index surging up by 2.4 percent.
Transportation, computer hardware, and banking stocks are also seeing notable strength, while gold stocks are bucking the uptrend amid a decrease by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both edged down by 0.1 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.
Meanwhile, the major European markets all moved sharply higher on the day. While the French CAC 40 Index surged up by 1.5 percent, the German DAX Index jumped by 1.2 percent and the U.K.'s FTSE 100 Index advanced by 1 percent.
In the bond market, treasuries are giving back ground after moving notably higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.4 basis points at 1.520 percent.
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