Courtesy of John Nyaradi.

Stocks rebounded on Thursday as durable goods orders skyrocketed 4.2 percent in June.

The bulls were back on Thursday, pushing stocks higher as the Census Bureau’s report on Durable Goods Orders indicated an enormous 4.2 percent jump during June, smashing economists’ expectations for a less-significant, 1.5 percent increase.

Homebuilder stocks continued to suffer on Thursday, as DR Horton’s (NYSEARCA:DHI) share price got slammed by 8.58 percent after new orders fell below expectations, as was the case with Pulte Group (NYSEARCA:PHM), which took a 10.3 percent nosedive.  The SPDR S&P Homebuilder Index ETF fell 1.39 percent (NYSEARCA:XHB).  As we discussed yesterday, the weekly Mortgage Purchase Applications Index by the Mortgage Bankers Association disclosed that the seasonally-adjusted Purchase Index sank 2 percent from the week ending July 12, despite the fact that the 30-year fixed rate declined from 4.68 percent to 4.58 percent.

Speaking of earnings, the company so many of us love to hate: Facebook (NASDAQ:FB) saw its share price skyrocket 29.61 percent after the company reported earnings of 13 cents per share, beatings EPS expectations of 9 cents.  Nevertheless, after all the excessive hype, publicity and overexcitement, its closing price of $34.36 per share was still far below its Initial Purchase Offering of $38 per share.

The Dow Jones Industrial Average (NYSEARCA:DIA) picked up 13 points to finish Thursday’s trading session at 15,555 for a 0.09 percent advance.  The S&P 500 (NYSEARCA:SPY) rose 0.26 percent to 1,690.

The Nasdaq 100 (NASDAQ:QQQ) climbed 0.67 percent to finish at 3,061.  The Russell 2000 (NYSEARCA:IWM) jumped 0.99 percent to – yes, it happened again – another record-high close at 1,054.

In other major markets, oil (NYSEARCA:USO) advanced 0.48 percent to close at $37.58.

On London’s ICE Futures Europe Exchange, September futures for Brent crude oil  advanced by 46 cents (0.43 percent) to $107.65/bbl. (NYSEARCA:BNO).

August Gold Futures advanced by $14.10 (1.07 percent) to $1,333.60 per ounce (NYSEARCA:GLD).

Read “The Commodities Correlation Conundrum”

Transports crawled ahead on Thursday, with the Dow Jones Transportation Average (NYSEARCA:IYT) advancing 0.04 percent.

In Japan, stocks fell as cautious investors headed to the sidelines before the release of earnings reports.  Because stock prices have been driven higher primarily due to yen weakness, investors are apparently not too confident that the financial data will support particular share prices.  The Nikkei 225 Stock Average sank 1.14 percent to 14,652 (NYSEARCA:EWJ).

In China, stocks declined following a gloomy outlook from the nation’s labor ministry, which focused on industrial overcapacity.  The Shanghai Composite Index fell 0.60 percent to close at 2,021 (NYSEARCA:FXI).  Hong Kong’s Hang Seng Index declined 0.31 percent to finish the session at 21,900 (NYSEARCA:EWH).

European stocks had a tough day on Thursday.  Concern about the economic slowdown in China intensified after the HSBC Flash China Manufacturing PMI for July fell further into the range of contraction to an eleven-month low, as disclosed on Wednesday.  Disappointing earnings reports from such companies as Siemens AG, Michelin, BASF and Unilever added to the bearish sentiment (NYSEARCA:VGK).

Germany’s DAX Index sank more than one percent, despite a better-than-expected report on German business confidence from the Ifo Institute.  The Ifo Business Climate Index for Germany rose to 106.2 from June’s 105.9, beating economists’ expectations for a reading of 106.1 (NYSEARCA:EWG).

The Euro STOXX 50 Index finished Thursday’s session with a 0.43 percent decline to 2,740 – remaining above its 50-day moving average of 2,694.  Its Relative Strength Index is 59.86 (NYSEARCA:FEZ).

Read “European Stocks Have a Tough Thursday”

Technical indicators reveal that the S&P 500 remained above its 50-day moving average of 1,643 after finishing Thursday’s session with a 0.26 percent advance to 1,690.  At this point, bears are hoping to see the formation of a head-and-shoulders pattern on the S&P chart.  Its Relative Strength Index rose from 63.57 to 64.96.  The MACD remains on a downward trajectory, suggesting a decline.

Read “U.S. Global Investors’ Secret: Keep Calm and Trade On”

For Thursday, all sectors were in positive territory.  The materials and utilities sectors led the group, with gains of 0.94 percent and 0.93 percent, respectively.  The industrials sector was the laggard, with a 0.04 percent advance.

Consumer Discretionary (NYSEARCA:XLY):  +0.14%

Technology:  (NYSEARCA:XLK):  +0.06%

Industrials (NYSEARCA:XLI):  +0.04%

Materials: (NYSEARCA:XLB):  +0.94%

Energy (NYSEARCA:XLE):  +0.67%

Financials: (NYSEARCA:XLF):  +0.10%

Utilities (NYSEARCA:XLU):  +0.93%

Health Care: (NYSEARCA:XLV):  +0.49%

Consumer Staples (NYSEARCA:XLP):  +0.53%

Bottom line:  The Census Bureau’s report on the sky-high surge in new orders for durable goods during June brought the major stock indices back into positive territory on Thursday, sending the Russell 2000 Index back to its daily routine of setting new record-high closing levels.  

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