Following the sell-off seen in the previous session, stocks showed a significant rebound during trading on Thursday. The major averages all moved back to the upside, with the tech-heavy Nasdaq showing a particularly strong upward move.
The major averages pulled back off their best levels late in the session but remained firmly positive. The Dow climbed 139.16 points or 0.5 percent to 26,659.11, the Nasdaq jumped 180.72 points or 1.6 percent to 11,185.59 and the S&P 500 surged up 39.08 points or 1.2 percent at 3,310.11.
The jump by the tech-heavy Nasdaq was partly being led by Facebook (FB), with the social media spiking by 4.9 percent ahead of the release of its third quarter results after the close of trading.
Tech giants Apple (AAPL), Alphabet (GOOGL) and Amazon (AMZN) also moved sharply higher higher ahead of the release of the quarterly results.
Shares of Netflix (NFLX) also surged up by 3.7 percent after the video streaming giant raised the prices of its standard and premium plans.
The strength on Wall Street also came following the release of a report from the Commerce Department showing a stronger than expected rebound by the U.S. economy in the third quarter.
The Commerce Department said real gross domestic product skyrocketed by 33.1 percent in the third quarter after plunging by 31.4 percent in the second quarter. Economists had expected GDP to soar by 31.0 percent.
The substantial rebound in GDP came as consumer spending bounced back sharply, spiking by 40.7 percent in the third quarter after plummeting by 33.2 percent in the second quarter.
"Overall, the initial recovery in GDP after the first wave of lockdowns were lifted was stronger than we originally anticipated," said Paul Ashworth, Chief U.S. Economist at Capital Economics.
He added, "But, with coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower."
Adding to the positive sentiment, the Labor Department released a report showing initial jobless claims fell to their lowest level since before the coronavirus-induced lockdowns in the week ended October 24th.
The report said initial jobless claims dropped to 751,000, a decrease of 40,000 from the previous week's revised level of 791,000.
Economists had expected jobless claims to dip to 775,000 from the 787,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 282,000 in the week ended March 14th.
Meanwhile, the National Association of Realtors released a report showing pending home sales unexpectedly pulled back off a record high in the month of September.
NAR said its pending home sales index slumped by 2.2 percent to 130.0 in September after spiking by 8.8 percent to 132.9 in August. The drop came as a surprise to economists, who had expected pending home sales to jump by another 3.4 percent.
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.
Bargain hunting also contributed to the rebound on Wall Street after the sell-off seen on Wednesday pulled the Dow down to a nearly three-month closing low. The Nasdaq and the S&P 500 also hit their lowest closing levels in over a month.
Sector News
Airline stocks showed a substantial move back to the upside on the day, with the NYSE Arca Airline Index spiking by 3.5 percent after ending the previous session at its lowest closing level in two months.
Oil stocks also saw considerable strength on the day, driving the NYSE Arca Oil Index up by 3 percent. The index bounced off a seven-month intraday low despite another steep drop by the price of crude oil.
Significant strength was also visible among semiconductor stocks, as reflected by the 2.7 percent jump by the Philadelphia Semiconductor Index.
Within the sector, shares of Inphi Corp. (IPHI) skyrocketed after the chipmaker agreed to be acquired by Marvell Technology (MRVL) for $10 billion in cash and stock.
Steel, transportation and chemical stocks also showed strong moves to the upside, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index fell by 0.4 percent, while Australia's S&P/ASX 200 Index slumped by 1.6 percent.
Meanwhile, the major European markets showed a lack of direction over the course of the session. While the German DAX Index eventually closed up by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index ended the day nearly unchanged.
In the bond market, treasuries moved notably lower over the course of the trading day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.4 basis points to 0.835 percent.
Looking Ahead
Earnings news may drive trading on Friday, with traders likely to keep a close eye on the quarterly results from the tech giants mentioned above.
Energy giants Exxon Mobil (XOM) and Chevron (CVX) are also among the companies due to report their results before the start of trading.
Reports on personal income and spending, Chicago-area business activity and consumer sentiment may also attract some attention along with the latest news on the coronavirus front.
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