Stock Market Today: Dow, S&P Close at Record Highs Ahead of Alibaba IPO

NEW YORK (TheStreet) -- U.S. stock indices picked up momentum from this morning to close higher Thursday as the Dow Jones Industrial Average  and S&P 500 continued to rally and hit new highs a day ahead of the highly anticipated Alibaba Group's IPO. The stock will list under ticker symbol "BABA" and will hit the trading floor Friday on the New York Stock Exchange.

The Dow Jones Industrial Average rose 0.64% to 17,265.99 after hitting a high of 17,275.37. The S&P 500 climbed 0.49% to 2,011.36. The Nasdaq was up 0.68% to 4,593.43.

U.S. stocks rallied to record levels Wednesday after the Federal Reserve eased concerns that the central bank could initiate its first rate hike before the summer.

Watch the video below for a closer look at how U.S. markets ended the trading day Thursday:


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Markets opened strong today after the Federal Reserve pledged to hold down interest rates, saying it would keep rates near zero for a "considerable time." Markets also got a lift from a move by China's central bank on Thursday to cut short-term borrowing costs for banks.

Throughout the day, economic reports including a decline in jobless claims by 36,000 to a lower-than-expected 280,000 for the week ended Sept. 13, gave the U.S. stocks a boost.

The global markets also were keenly focused on developments in Scotland's independence vote, where more than 4.2 million voters cast their ballots. The polling places are expected to close at 10 p.m. Edinburgh, Scotland time or 5 p.m. EDT.

According to USA Today, Scottish independence would take with it "one-third of the United Kingdom's land mass, 8% of its population, about 10% of its tax revenue, and an incalculable amount of cultural and intellectual capital."

As the world watched the referendum closely, traders have surprisingly sent the British pound to fresh multi-year highs vs. the euro and multi-week highs against the greenback. David Rodriguez, quantitative strategist at DailyFX, said foreign exchange traders sent overnight volatility prices on the British pound to their highest since the last U.K. general election in 2010, unable to dismiss the threat of a major upset if Scottish voters did indeed vote for secession.

"Many traders have closed GBP-short positions in a hurry on what promises to be big volatility as results come in," said Rodriguez. "The lack of actual vote results and a ban on exit polls tells us this [increase] is largely a technical correction."

The pound gained 0.6% against the U.S. dollar Thursday hitting as high as 1.64078. The pound-euro exchange rate rose 0.2% after hitting a high of 1.2731.

The FTSE 100 in the U.K. closed at 0.57%.

The People's Bank of China reduced interest rates on 14-day repurchase agreements by 20 basis points to 3.5%. This follows the PBOC's move earlier this week to use its standing lending-facility to boost liquidity in the country's five biggest banks by 500 billion yuan ($81 billion).

On the economic front, U.S. housing starts for August dropped 14.4% to a seasonally adjusted annual pace of 956,000 vs. the 1.05% increase expected by economists.

The general business conditions index of the Philadelphia Fed's Business Outlook Survey came in at a lower-than-expected 22.5 for September, down from 28.

Rite Aid (RAD) plunged 18.52% Thursday after the drugstore chain cut its fiscal 2015 earnings guidance to reflect the possibility of a decrease in pharmacy margins during the second half of the year. Shares of Rite Aid are down 0.37% in after-hours trading.

Shares of Bank of America  (BAC) rose 1.61% after The Wall Street Journal reported the bank will offer mortgages at discounted interest rates to assist low-income borrowers or those with histories of sub-prime credit.

ConAgra Foods (CAG)  climbed 4.59% following the food company reported its fiscal first-quarter earnings that more than doubled as cost-savings programs across the country offset essentially flat revenue.

VIVUS (VVUS)  soared 12.37% in Thursday trading following FDA approval of the comCAGpany's erectile dysfunction drug Stendra that cuts in the time necessary between taking the pill and engaging in sexual activity in half. Shares are up 0.46% in after-hours trading.

Yahoo!  (YHOO) fell 1.19% after CNBC reported Alibaba plans to price its IPO within its range of $66 to $68, rather than at the speculated amount of $70 or more. The company has a 22.5% stake in the Chinese e-commerce giant. In after-hours trading, the stock is up 0.44%.

MSCI  (MSCI) shares gained 5.81% on nine times normal trading volume after the stock index provider declared an 18 cent per share quarterly dividend on October 31 to its shareholders.

Sears (SHLD) stock slipped 5.28% after analysts at Credit Suisse (CS)  issued a negative note, saying the retailer should liquidate its assets while it can, out of consideration for its vendors and shareholders. Shares continue to fall 0.21% in after-hours.

Shares of the United States Oil Fund (USO)  closed down 1.11% and were falling 0.03% in after-hours. The SPDR Gold Trust (GLD)  was up 0.2%, and continued to climb 0.03% in after-hours trading on Thursday.

-- By Kurumi Fukushima in New York

Follow @TheStreet_Rumi

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