Shares Rise as 3 Reports Show Strengthening Economy
By THE ASSOCIATED PRESS
hree upbeat economic reports, ranging from jobless claims to regional manufacturing, cheered Wall Street yesterday, prompting investors to pick up shares on strengthening expectations of a solid recovery. The Nasdaq composite index reached another 16-month high.
"Jobless claims were benign, so people were relieved by that," said Henry Herrmann, chief investment officer at Waddell & Reed Financial. "No one wants to see a bad claims or bad employment number. We didn't get one, so that allowed people to focus on other good news."
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The Dow Jones industrial average rose 26.17 points, or 0.3 percent, to close at 9,423.68. The Nasdaq composite index advanced 17.01 points, or 1 percent, to 1,777.55. The last time the technology-focused index closed higher was April 19, 2002, when it finished at 1,796.83.
The Standard & Poor's 500-stock index gained 2.97 points, or 0.3 percent, to 1,003.27.
The Labor Department reported that 386,000 newly laid-off workers filed claims for jobless benefits last week, down 17,000 from the previous week. The number is the lowest level of new jobless claims in six months.
The Conference Board, meanwhile, said its index of leading economic indicators rose 0.4 percent in July to 112.5, after a revised 0.3 percent increase in June. It was the fourth consecutive month of gains; the reading met analysts' expectations.
And the Philadelphia Federal Reserve reported that its business index jumped to 22.1 this month, compared with 8.3 in July. Analysts were expecting a much more modest reading of 10.0.
"The Philly Fed index reading was excellent because it showed new orders and shipments were up," said Neil Massa, equity trader at John Hancock Funds. "For investors looking for a reason that the economy is turning around, that would be a big one."
Stocks have climbed in recent weeks as investors remain upbeat about a speedy recovery. But some analysts caution that the market might be due for a retreat because the economic outlook remains somewhat murky.
"I've been surprised that no matter what — whether it's the blackout, bombings overseas or a computer virus — nothing can keep this market down," Mr. Massa said. The sell-off on Wednesday, he said, "seemed to be a bit of a rest; nothing indicated a change of direction."
Monsanto climbed $1.43, to $24.12, after the company, whose businesses including developing genetically engineered crops, agreed to settle a lawsuit contending it dumped polychlorinated biphenyls, or PCB's, in Alabama. Merrill Lynch upgraded the company's stock rating to buy from neutral.
Goodyear Tire and Rubber advanced 26 cents, to $6.56, after it reached a tentative agreement on a three-year contract with the United Steelworkers of America, reducing the threat of a strike.
Decliners included Krispy Kreme, the doughnut maker, which fell $1.42, to $47.50, even though it reported second-quarter profit that came in higher than analysts' estimates.
Pfizer, the drug maker, dropped 95 cents, to $29.79, after Smith Barney cut the stock rating to in line from outperform.
Treasury Yields Rise
By Reuters
Treasury yields shot to nine-month highs yesterday after the shock of a huge surge in regional manufacturing prompted investors to bring forward their expectations for a possible interest rate rise.
The 10-year Treasury note fell 1432, to a price of 98432. The note's yield, which moves in the opposite direction from the price, gained to 4.49 percent from 4.43 percent on Wednesday.
The price of the 30-year Treasury bond dropped 232, to 1011032. The bond's yield rose to 5.29 percent from 5.28 percent on Thursday. |
