Encouraging news on jobs, retailers lifts stocks
NEW YORK (AP) — Upbeat news about jobs and retailers lifted the stock market in early afternoon trading Thursday.
Unemployment claims fell close to their lowest level in six years, the government reported, and J.C. Penney and Bed Bath & Beyond delivered good news for investors.
The positive trends eased worries about budget gridlock in Washington, which has led the Standard & Poor’s 500 stock index to a five-day losing streak through Wednesday, its longest this year. The potential for a government shutdown looms as the White House and Republican-led Congress square off in a budget fight.
The S&P 500 index rose five points, or 0.3 percent, to 1,698 as of 12:44 p.m. Eastern Daylight Time Thursday. The index is 27 points below its all-time high set last Wednesday.
“There’s a little bit of a bounce here,” said Robert Pavlik, chief market strategist at Banyan Partners. “It may be a little bit of bargain hunting.”
While Thursday’s economic news was encouraging, it wasn’t spectacular. That justified the Federal Reserve’s surprise decision last week to keep up its economic stimulus, some analysts said.
The U.S. central bank has been buying $85 billion of bonds a month to keep long-term interest rates low, which has encouraged borrowing and driven up stock prices. Wall Street had been expected the Fed to start easing back on its stimulus.
“It’s fair to say that the Fed got it right by delaying,” the cuts to stimulus, said Ron Florance, deputy chief investment officer for Wells Fargo Private Bank. “Growth is uninteresting and subdued.”
Growth-sensitive retail stocks were among the best performers in the 10 industry groups that make up the S&P 500 index.
The group got a lift from the troubled department store owner J.C. Penney, which said in a statement that it was pleased with its turnaround efforts. The company’s stock rose 85 cents, or 8.4 percent, to $10.96.
Bed Bath & Beyond also gave the industry a boost. The stock gained $3.95, or 5.3 percent, to $78.16 after the company said Wednesday its quarterly profit increased 11 percent on stronger sales.
Other stock indexes rose. The Dow Jones industrial average climbed 57 points, or 0.4 percent, to 15,331. The Nasdaq climbed 26 points, or 0.7 percent, to 3,787.
In government bond trading, the yield on the 10-year note climbed to 2.65 percent from 2.63 percent late Wednesday. The yield on the note has fallen as investors buy more bonds.
The price of oil rose 28 cents, or 0.3 percent, to $102.95 a barrel. Gold fell $10.40, or 0.8 percent, to $1,325.80 an ounce.
The dollar rose against the euro and the Japanese yen.
Among other stocks making big moves;
— Hertz fell $3.41, or 13 percent, to $22.37 after the car rental company cut its earnings and revenue forecasts because of weaker-than-expected demand at U.S. airports.
— Caesars Entertainment fell $1.70, or 7.9 percent, to $19.27 after the company said late Wednesday that it plans to sell up to 11.5 million of its shares in a public offering.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.