U.S. Stocks Show Strong Move Back To The Upside Following Yesterday’s Pullback

Following the sharp pullback seen late in Wednesday’s session, stocks showed a strong move back to the upside during trading on Thursday. The major averages all moved notably higher, largely offsetting yesterday’s steep losses.

The major averages saw further upside going into the close, reaching new highs for the session. The Dow advanced 322.35 points or 0.9 percent to 37,404.35, the Nasdaq surged 185.92 points or 1.3 percent to 14,963.84 and the S&P 500 jumped 48.40 points or 1.0 percent to 4,746.75.

The rebound on Wall Street came as some traders saw the sharp pullback seen late in the previous session as a buying opportunity amid expectations the markets will see further upside.

Positive sentiment was also generated in reaction to revised Commerce Department data showing consumer prices increased by less than previously estimated in the third quarter.

The Commerce Department said the surge in consumer prices in the third quarter was downwardly revised to 2.6 percent from 2.8 percent.

The increase in core consumer prices, which exclude food and energy prices, was also downwardly revised to 2.0 percent from 2.3 percent.

The revised inflation data was included in a report showing the spike in gross domestic product in the third quarter was downwardly revised to 4.9 percent from 5.2 percent. Economists had expected the pace of GDP growth to be unrevised.

“While third quarter GDP was revised slightly lower, the bigger news was the downward revisions to both headline and core PCE inflation, both of which showed faster progress toward the Fed’s 2% target,” said Michael Pearce, Lead US Economist at Oxford Economics.

He added, “That helps vindicate the Fed’s dovish shift in messaging, and, if sustained, opens the door to earlier rate cuts than our current September forecast.”

A separate report released by the Labor Department on Thursday showed a slight uptick by initial jobless claims in the U.S. in the week ended December 16th.

The Labor Department said first-time claims…