Encouraging news on jobs, retailers lifts stocks
NEW YORK (AP) -- Upbeat news about jobs and retailers helped the Standard & Poor’s 500 index snap its longest losing streak of the year on Thursday.
U.S. unemployment claims fell close to their lowest level in six years, the government reported, and J.C. Penney and Bed Bath & Beyond delivered encouraging news.
The positive trends outweighed worries about a potential government shutdown in Washington next week. Those concerns had led the S&P 500 index to five consecutive days of declines, the index’s worst run in 2013.
That ended Thursday when the S&P 500 index rose six points, or 0.4 percent, to close at 1,698.67.
"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."
The broad index is less than two percent below its all-time high from Sept. 18.
U.S. economic growth rose to an annual rate of 2.5 percent from April through June, the Commerce Department reported Thursday. That was an increase from the 1.1 percent growth in the previous quarter.
Applications for unemployment benefits fell 5,000 to a seasonally adjusted 305,000 last week, the government said, the fewest since September 2007, three months before the Great Recession began.
While the economic news was encouraging, it wasn’t spectacular. Some analysts said it justified the Federal Reserve’s surprise decision last week to keep up its economic stimulus.
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 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 it was pleased with its turnaround efforts.
The company’s stock ended the day up 30 cents, or 3 percent, at $10.42.
Shares, however, fell more than 5 percent in after-markets trading following the company’s announcement that it planned to sell up to 96.6 million shares of common stock in a public offering. It was the latest indication the chain is looking to shore up its cash reserves.
Bed Bath & Beyond also gave the industry a boost. The stock climbed $3.32, or 4 percent, to $77.54 after the company said its quarterly profit increased 11 percent.
Other stock indexes rose. The Dow Jones industrial average climbed 55 points, or 0.4 percent, to 15,328. The Nasdaq climbed 26 points, or 0.7 percent, to 3,787.
In government bond trading, the yield on the 10-year note edged up to 2.64 percent from 2.63 percent late Wednesday.
Among other stocks making big moves;
* Hertz fell $4.15, or 16 percent, to $21.63 after the car rental company cut its earnings and revenue forecasts because of weaker-than-expected demand at U.S. airports.
* Caesars Entertainment slipped $1.08, or 5 percent, to $19.84 after the company said late Wednesday that it plans to sell up to 11.5 million of its shares in a public offering.
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