U.S. stocks rose on Thursday, bouncing back after a three-session slide, as Chinese trade data beat expectations and Wall Street considered the impact of jobless claims on the timing of reductions in the Federal Reserve’s bond-buying program.
“The labor market isn’t seeing the big improvement necessary for the Fed to begin their big taper, I believe, at least until December,” said Chris Gaffney, senior market strategist at EverBank Wealth Management.
In China, data showed that exports and imports rebounded sharply in July, confirming that “China is going from an export-driven to a consumer-led economy,” said Gaffney.
After rising 86 points and falling 52, the Dow Jones Industrial Average DJIA +0.18% gained 27.65 points, or 0.2%, to end at 15,498.32.
Among the blue-chip losses, J.P. Morgan Chase & Co.’s JPM -0.85% shares fell 0.9% after the bank on Wednesday disclosed it faces a federal criminal probe of its practices relating to sales of mortgage-backed bonds.
McDonald’s Corp. MCD -0.29% reported sales at stores open at least 13 months climbed 0.7% in July, beating Wall Street’s expectations. The fast-food chain and Dow component fell 0.3%. Its shares are up more than 11% this year.
The S&P 500 index SPX +0.39% rose 6.57 points, or 0.4%, to 1,697.48, halting a decline that had the index off 1.1% during the first three days of the week on thinking the Federal Reserve would cut back on its bond purchases as soon as next month.
Telecommunications led declines among the S&P 500’s major industry groups and materials performed the best, with the price of gold GCZ3 -0.21% climbing back above $1,300 an ounce.
CenturyLink Inc. CTL -5.58% shares declined 5.6%, a day after the phone company reduced its sales forecast for the year.
Cliffs Natural Resources Inc. CLF +8.91% and Newmont Mining Corp. NEM +8.69% were among the lead gainers on the S&P 500, with the former up 8.9% and the latter rising 8.7%.
The Nasdaq Composite COMP +0.41% rose 15.12 points, or 0.4%, to 3,669.12.
For every share falling, nearly two gained on the New York Stock Exchange, where 689 million shares traded.
Composite volume cleared 3.2 billion.
The dollar DXY -0.03% dipped against the currencies of major U.S. trading partners including the euro EURUSD +0.03% , helping boost dollar-denominated commodities such as gold.
Treasury prices rose after yields close to two-year highs sparked demand for the 10-year note 10_YEAR +0.35% at an auction Wednesday. The yield on the 10-year on Thursday fell 2 basis points to 2.59%.
The price of oil fell for a fifth session, with the September futures contract CLU3 +0.43% losing 97 cents to end at $103.40 a barrel on the New York Mercantile Exchange.
The Labor Department said Thursday that initial claims for unemployment benefits climbed to 333,000 last week, while the number of claims in the four weeks ending Aug. 3 fell to 335,500 on average, the lowest level since November 2007, the month before the recession started.
The improving labor market and rising home prices helped the percentage of seriously-delinquent mortgages fall to a near five-year low in the second quarter, the Mortgage Bankers Association reported Thursday.
“Clearly the U.S. economy is getting stronger; we’ve seen steady improvement in the companies we cover,” Peter Sidoti, chief executive officer of Sidoti & Co., said of nearly 800 small-cap companies.
“Very few are talking about reducing employment at this time. We certainly see more strength in earnings growth we cover and revenue than [gross national product] numbers would indicate,” Sidoti said.
And, unlike many investment strategists, Sidoti is not concerned with the timetable for changes in the Fed’s monetary policy and what Federal Reserve Chairman Ben Bernanke and his colleagues might be thinking.
“My CEOs and CFOs don’t get up every morning worrying about what Bernanke is going to do. The companies we cover make decisions based on customers and revenue coming in the door,” Sidoti said.
Source: Marketwatch
