WASHINGTON (dpa-AFX) - After showing a significant move to the downside early in the session, stocks showed a notable recovery attempt over the course of the trading day on Thursday. The major averages climbed well off their lows of the session, with the Nasdaq and S&P 500 closing roughly flat.
The tech-heavy Nasdaq inched up 3.34 points or less than a tenth of a percent to 26,939.37, while the S&P 500 edged down 1.90 points or less than a tenth of a percent to 7,704.13.
The narrower Dow climbed well off its worst levels but still closed down 161.61 points or 0.3 percent at 51,349.98.
The rebound from the early slump was triggered in part by a Reuters report indicating U.S. and Iranian negotiators are discussing a phased deal to end the prolonged Middle East conflict.
Citing sources close to the talks, Reuters said the U.S. and Iran are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.
Stocks responded positively to the report even as the price of crude oil gave back some ground but remained sharply higher on the day.
U.S. crude oil futures are still up by about 3 percent after spiking by 5 percent earlier in the session, keeping buying interest on Wall Street somewhat subdued.
Treasury yields also surged on the day, with the ten-year yield reaching its highest closing level since July 2007 amid the jump in crude oil futures and concerns about inflation and interest rates.
While commodities and bond traders seem to be growing tired of reports of a potential deal and awaiting more concrete developments, stock traders were willing to buy into the optimism once again.
The hopes for an end to the Middle East conflict come despite conflicting speeches by President Donald Trump and Iranian President Masoud Pezeshkian at the UN General Assembly.
Trump threatened to 'annihilate' Iran in his remarks, while Pezeshkian condemned what he called 'signs of a bullying mentality' from the U.S. and said that Iran would never surrender.
Sector News
Biotechnology stocks showed a strong move to the upside over the course of the session, driving the NYSE Arca Biotechnology Index up by 1.5 percent.
Some strength also emerged among pharmaceutical stocks, as reflected by the 1 percent gain posted by the NYSE Arca Pharmaceutical Index.
On the other hand, gold stocks saw continued weakness amid a decrease by the price of the precious metal, with the NYSE Arca Gold Bugs Index falling by 1.4 percent.
Transportation stocks also ended the day notably lower amid the surge in crude oil prices, dragging the Dow Jones Transportation Average down by 1.3 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. China's Shanghai Composite Index slumped by 1.2 percent and Hong Kong's Hang Seng Index dipped by 0.3 percent, but Japan's Nikkei 225 Index bucked the downtrend and climbed by 0.8 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the German DAX Index and the French CAC 40 Index are both down by 0.5 percent.
In the bond market, treasuries slid firmly into negative territory over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.0 basis points to 5.160 percent.
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