Stocks continued to climb higher on Thursday, after Standard & Poor’s reported that fourth quarter GDP grow 0.6 percent less than previously anticipated as result of the government shutdown. The news resulted in widespread prognostication that the Federal Reserve would postpone the taper of its bond purchases. Dallas FedHead Richard Fisher, who vociferously opposed the FOMC’s vote against the “Septaper”, admitted that another delay would be necessary. Although the Dow Jones Industrial Average lost 2 points on Thursday, S&P 500 reached a new record high.
The Dow Jones Industrial Average (DIA) lost 2 points to finish Thursday’s trading session at 15,371 for a 0.01 percent dip. The S&P 500 (SPY) surged 0.67 percent to a record-high close at 1,733.15 after hitting a new record intraday high of 1,733.45.
The Nasdaq 100 (QQQ) climbed 0.60 percent to finish at 3,301. The Russell 2000 (IWM) soared 0.90 percent to reach a new record-high close at 1,102.27 after hitting a record intraday high of 1,102.28.
In other major markets, oil (NYSEARCA:USO) sank 1.46 percent to close at $36.38.
On London’s ICE Futures Europe Exchange, December futures for Brent crude oil fell $1.52 (1.37 percent) to $109.07/bbl. (BNO).
December gold futures climbed $38.40 (2.99 percent) to $1,320.70 per ounce (GLD).
Transports made it as far as third gear on Thursday, with the Dow Jones Transportation Average (IYT) advancing 0.19 percent.
In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Although excitement about the deal in Washington was described as the reason for Japan’s stock market advance on Thursday, the true reason was that the dollar weakened as a result of the resolution. Stocks made a strong move as the yen fell as low as 99.01 per dollar during Thursday’s trading session in Tokyo. A weaker yen causes Japanese exports to be more competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average surged 0.83 percent to 14,586 (EWJ).
In China, stocks declined after a report from Berlin’s Transparency International revealed that China’s companies had the lowest ranking on the list for “Transparency in Corporate Reporting”. Meanwhile, BlackRock’s sobering outlook for Hong Kong sent the Hang Seng Index into the red. The Shanghai Composite Index declined 0.21 percent to close at 2,188 (FXI). Hong Kong’s Hang Seng Index fell 0.57 percent to end the day at 23,094 (NYSEARCA:EWH).
In Europe, stocks declined after Thursday’s batch of disappointing earnings reports. The Euro STOXX 50 Index finished Thursday’s session with a 0.17 percent decline to 3,010 – remaining above its 50-day moving average of 2,867. Its Relative Strength Index is 69.66 (FEZ).
Technical indicators revealed that the S&P 500 climbed further above its 50-day moving average of 1,679 after finishing Thursday’s session with a 0.67 percent surge to 1,733. Its Relative Strength Index rose from 60.60 to 63.36. The MACD climbed further above the signal line, suggesting the likelihood of a continued advance.
For Thursday, all sectors were solidly in positive territory. The utilities sector led the group, with a 1.62 percent jump.
Consumer Discretionary (XLY): +0.74%
Technology: (XLK): +0.03%
Industrials (XLI): +0.76%
Materials: (XLB): +1.29%
Energy (XLE): +0.21%
Financials: (XLF): +0.90%
Utilities (XLU): +1.62%
Health Care: (XLV): +0.84%
Consumer Staples (XLP): +1.12%
Bottom line: Another likely taper delay sent stocks higher on Thursday after Standard & Poor’s disclosed that fourth quarter GDP will expand by 0.6 percent less than previously anticipated as a result of the government shutdown.