US stocks end day with strong gains

The S&P 500 and Dow Jones Industrial Average closed at record levels on Thursday

US stocks closed strongly higher on Thursday, 18 September 2014 at Wall Street. Equities rallied out of the gate with the financial sector providing noteworthy support for the second day in a row. The S&P 500 and Dow Jones Industrial Average closed at record levels on Thursday as investors welcomed the Federal Reserve's commitment to low interest rates long after the ending of monetary stimulus. Earlier in the session, investors cheered China's efforts to boost economic growth, while upbeat jobs data outweighed weakness in U.S. housing.

The Dow Jones Industrial Average gained 109.14 points, or 0.6%, to 17,265.99, also setting a new record. The Nasdaq Composite rose 31.24 points, or 0.7%, to 4,593.43. The S&P 500 added 9.79 points, or 0.5%, to 2,011.36, closing at a record high.

Financials led Thursday's gains. Other influential sectors like health care and technology also served up a measure of support. The health care sector settled ahead of the broader market, but the biotech group was a reluctant participant in the advance.

Among economic data expected at Wall Street on Thursday, the latest Initial Claims report revealed a drop to 280,000 from 316,000, while the consensus expected a more modest decline to 305,000. The reading marked its lowest level since July and aptly supports the view that the weak payroll growth seen in August is likely to be revised higher.

Housing Starts fell to a seasonally adjusted annualized rate of 956,000 units in August from a revised 1.117 million units in July, while the consensus expected a decrease to 1.045 million units. Building permits fell to a seasonally adjusted annualized rate of 998,000 versus a revised 1.057 million for July, while the consensus expected permits to come in at 1.054 million.

Separately, the Philadelphia Fed Survey for September fell to 22.5 from 28.0, while market had expected that the Survey would slip to 23.5.

Alibaba is expected to start trading on the New York Stock Exchange on Friday morning. The initial public offering could raise over $25 billion, making it the biggest ever.

News from China boosted global equities. China's central bank cut short-term borrowing costs for banks on Thursday, the same week it announced a cash injection into the country's five biggest banks.

Bullion metals ended lower on Thursday, 18 September 2014 at Comex. The price of gold on Thursday settled at its lowest closing since end of December, leading a broad decline in the metals group after the Federal Reserve indicated that it was not inclined to move quickly to raise interest rates. The dollar continued to strengthen across the board on Thursday.

Gold for December delivery slid $9, or 0.7%, to $1,226.90 an ounce, its lowest close since it settled at $1,205.70 on 31 December 2013. December silver lost 1.1% to $18.45 an ounce.

Crude Oil futures fell on Thursday, 18 September 2014 at Nymex under pressure from a rising dollar and growing crude supplies. The dollar continued to notch six-year highs versus the Japanese yen, maintaining upside momentum after Wednesday's Federal Reserve statement and news conference by Fed Chairwoman Janet Yellen. A stronger dollar makes commodities priced in the currency more expensive to users of other currencies.

Light, sweet crude for October delivery fell $1.35, or 1.4%, to settle at $93.07 a barrel on the New York Mercantile Exchange.

A day before, the U.S. Energy Information Administration reported a surprise increase in crude-oil inventories in the week ended 12 September 2014. Market had anticipated a supply drop.

Treasuries ended flat after surrendering their overnight gains. The 10-yr yield settled at 2.63%.

Participation was ahead of recent averages with more than 660 million shares changing hands at the NYSE.

Tomorrow, the Leading Indicators report for August (consensus 0.4%) will be released at 10:00 ET. In addition, investors will be responding to the results of the independence referendum in Scotland.

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