WASHINGTON (dpa-AFX) - With traders reacting to several positive catalysts, stocks have moved sharply higher in morning trading on Thursday. The major averages are extending yesterday's rally to reach their best intraday levels in over a month.
Currently, the major averages are hovering near their best levels of the day. The Dow is up 456.71 points or 1.7 percent at 26,812.18, the Nasdaq is up 145.89 points or 1.8 percent at 8,122.77 and the S&P 500 is up 43.37 points or 1.5 percent at 2,981.15.
The continued strength on Wall Street partly reflects a positive reaction to news that the U.S. and China plan to hold high level trade talks in early October.
A statement from China's Commerce Ministry said both sides agreed to the new round of talks during a phone call between Chinese Vice Premier and chief trade negotiator Liu He and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
'Both sides agreed they should work together and take practical actions to create favorable conditions for the negotiations,' China's Commerce Ministry said, according to a CNBC translation.
A spokesperson for the U.S. Trade Representative's office confirmed the phone call and said the U.S. and China agreed to hold meetings 'in the coming weeks.'
U.S. and Chinese officials will purportedly hold deputy-level talks later this month in preparation for the meeting in October.
A report from payroll processor ADP showing stronger than expected private sector job growth in August has also generated buying interest.
The report said private sector employment surged up by 195,000 jobs in August after climbing by a downwardly revised 142,000 jobs in July.
Economists had expected employment to increase by about 149,000 jobs compared to the addition of 156,000 jobs originally reported for the previous month.
'Businesses are holding firm on their payrolls despite the slowing economy,' said Mark Zandi, chief economist of Moody's Analytics. 'Hiring has moderated, but layoffs remain low. As long as this continues recession will remain at bay.'
On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.
Employment is expected to increase by 158,000 jobs in August after climbing by 164,000 jobs in July, while the unemployment rate is expected to hold at 3.7 percent.
Shortly after the start of trading, the Institute for Supply Management released a separate report showing a notable acceleration in the pace of growth in U.S. service sector activity in the month of August.
The ISM said its non-manufacturing index climbed to 56.4 in August after falling to 53.7 in July, with a reading above 50 indicating growth in service sector activity. Economists had expected the index to inch up to 54.0.
The bigger than expected increase by the non-manufacturing index came after it dropped to its lowest level since August of 2016 in the previous month.
Semiconductor stocks have shown a substantial move to the upside in morning trading, driving the Philadelphia Semiconductor Index up by 4.1 percent to its best intraday level in a month.
A continued increase by the price of crude oil is also contributing to considerable strength among oil service stocks, as reflected by the 4.1 percent jump by the Philadelphia Oil Service Index.
Financial, steel, and transportation stocks also are also seeing significant on the day, moving higher along with most of the other sectors amid broad-based buying interest.
Gold stocks are among the few groups bucking the uptrend, with a steep drop by the price of the precious metal weighing on the sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 2.1 percent, while China's Shanghai Composite Index jumped by 1 percent.
Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index has slid by 0.6 percent, the German DAX Index is up by 0.9 percent and the French CAC 40 Index is up by 1.2 percent.
In the bond market, treasuries have shown a steep drop after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 11.3 basis points at 1.572 percent.
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