U.S. Stocks Seeing Further Upside After Early Advance

After moving notably higher early in the session, stocks have seen further upside over the course of the trading day on Thursday. The major averages have all surged, extending the substantial rebound seen earlier in the week.

Currently, the major averages are just off their highs of the session. The Dow is up 490.73 points or 1.5 percent at 33,765.31, the Nasdaq is up 216.05 points or 1.7 percent at 13,277.52 and the S&P 500 is up 73.10 points or 1.7 percent at 4,310.96.

The extended rally on Wall Street partly reflects optimism about the outlook for interest rates following the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed left interest rates unchanged for the third time in the past four meetings, leading to optimism that the central bank is done raising interest rates.

Treasury yields moved notably lower on Wednesday and have shown another significant move to the downside today, adding to the buying interest.

The latest economic data has added to the optimism about rates, with the Labor Department releasing a report showing an unexpected uptick in first-time claims for U.S. unemployment benefits in the week ended October 28th.

The report said initial jobless claims crept up to 217,000, an increase of 5,000 from the previous week’s revised level of 212,000.

Economists had expected jobless claims to come in unchanged compared to the 210,000 originally reported for the previous week.

A separate report from the Labor Department also showed an unexpected decrease in unit labor costs in the third quarter.

The Labor Department said unit labor costs fell by 0.8 percent in the third quarter after shooting up by a revised 3.2 percent in the second quarter.

Unit labor costs were expected to climb by 0.7 percent compared to the 2.2 percent increase that had been reported for the previous quarter.

“Stocks are rallying as Treasury yields plunge after another soft labor market reading,” said Edward Moya, senior market analyst at OANDA. “If Wall Street sees a…