U.S. equities finished higher for a third-straight day, continuing to pare the large losses seen last week and Monday, with trade concerns continuing to ease and following some upbeat earnings and economic data. Dow members Walmart and Cisco Systems were higher on their respective positive results, housing construction and building permits beat forecasts, regional manufacturing activity moved further into expansion territory and jobless claims declined. Treasury yields were modestly higher, as was the U.S. dollar, while crude oil prices gained ground and gold was lower.

The Dow Jones Industrial Average (DJIA) rose 215 points (0.8%) to 25,863, the S&P 500 Index increased 25 points (0.9%) to 2,876, and the Nasdaq Composite gained 76 points (1.0%) to 7,898. In moderate volume, 759 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.85 to $62.87 per barrel and wholesale gasoline was $0.05 higher at $2.06 per gallon. Elsewhere, the Bloomberg gold spot price decreased $9.48 to $1,287.01 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.3% higher at 97.86.

Housing starts for April rose 5.7% month-over-month (m/m) to an annual pace of 1,235,000 units, above the Bloomberg forecast of 1,209,000 units. March starts were revised higher to an annual pace of 1,168,000. Building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, increased 0.6% m/m to an annual rate of 1,296,000, versus expectations of a 1,289,000 pace, and compared to March’s upwardly-revised 1,288,000 rate. Starts rose for both single-unit and multi-unit structures, while a jump in multi-unit structures boosted permits, overshadowing a decline in single-unit authorizations.

Weekly initial jobless claims fell 16,000 to 212,000, compared to estimates of 220,000, with the prior week’s figure being unrevised at 228,000. The four-week moving average increased by 4,750 to 225,000, while continuing claims dropped by 28,000 to 1,660,000, south of estimates of 1,673,000.

The Philly Fed Manufacturing Index in May moved further into expansion territory (a reading above zero) than expected, jumping to 16.6 versus expectations to increase to 9.0 from April’s 8.5 level.

Treasuries were lower, as the yields on the 2-year and 10-year notes increased 2 bps to 2.18% and 2.39%, respectively, and the 30-year bond rate gained 1 basis point to 2.84%. Bond yields have recovered from a recent drop and the U.S. Dollar Index was higher, while the stock markets continue to chip away at Monday’s selloff. Volatility has ramped up amid escalated trade tensions and uncertainty after the U.S. on Friday increased tariffs on Chinese goods and U.S.-China talks ended without a deal last week, while China retaliated with increased levies on U.S. goods. Also, retail sales and industrial production reports out of the U.S. and China missed expectations to preserve global growth concerns. However, trade concerns have cooled as the week has progressed, courtesy of comments from President Donald Trump that he expects a successful meeting with Chinese President Xi at the late-June G-20 summit and amid reports that the White House plans to delay imposing tariffs on auto imports.

©2019 Charles Schwab & Co., Inc., Member SIPC. All rights reserved.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.