Markets Back in the Green…..

U.S. equities finished higher as the bulls were able to take the reins again following a bumpy week. The gains however were largely held in check with tomorrow’s key labor report on the horizon. Earnings results continued in earnest, with Electronic Arts beating expectations and upping its guidance, Viacom-CBS missing on the bottom line, but besting revenue forecasts on higher subscription additions, and MGM Resorts posting a smaller-than-expected loss and announcing the sale of MGM Properties to a real estate investment trust. In economic news, weekly initial jobless claims moderated roughly in line with economists’ projections and the trade deficit widened. Treasuries were lower, pushing yields higher, and the U.S. dollar was nearly unchanged, while gold traded to the downside and crude oil prices were able to pare some of a recent tumble. Stocks in Europe were mostly higher amid a slew of earnings in the region and following the Bank of England’s policy decision, while markets in Asia were mixed in a somewhat subdued session.

The Dow Jones Industrial Average rose 272 points (0.8%) to 35,064, the S&P 500 Index gained 26 points (0.6%) to 4,429, and the Nasdaq Composite increased 115 points (0.8%) to 14,895. In moderate volume, 790 million shares were traded on the NYSE and 4.0 billion shares changed hands on the Nasdaq. WTI crude oil advanced $0.97 to $69.09 per barrel. Elsewhere, the gold spot price lost $6.80 to $1,807.60 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly flat at 92.25.

Jobless claims moderate, Treasuries finish lower…..

Weekly initial jobless claims came in at a level of 385,000 for the week ended July 31, versus forecasts calling for 383,000 and compared to the prior week’s downwardly-revised 399,000 level. The four-week moving average declined by 250 to 394,000, and continuing claims for the week ended July 24 dropped by 336,000 to 2,930,000, south of estimates of 3,255,000. The four-week moving average of continuing claims decreased by 109,250 to 3,188,250.

The trade balance showed that the June deficit widened by a larger amount than anticipated, increasing to $75.7 billion, from May’s downwardly-revised deficit of $71.0 billion, and compared to forecasts of $74.2 billion. Exports increased 0.6% m/m, and imports grew 2.1%.

Treasuries were lower, as the yields on the 2-year note and the 30-year bond were up 2 basis points (bps) to 0.20% and 1.86%, respectively, while the yield on the 10-year note rose 4 bps to 1.22%.

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