By Peter McKay
Stocks climbed Thursday as investors focused on the positive
aspects of new data on jobless claims, the latest of several
releases offering hints about the outlook for employment and retail
spending.
The Dow Jones Industrial Average (DJI) closed up 68.78 points,
or 0.7%, to 10,405.83. Its top gainers were Walt Disney (DIS) and
Alcoa (AA).
The Nasdaq Composite Index (RIXF) rose 0.3%. The Russell 2000
(RUT) was off 0.6%.
The S&P 500 (SPX) increased 0.5% to 1101, led by gains of 1%
each in its health-care and consumer-discretionary sectors.
Starbucks (SPX) rose 4.7%, while Kohl's (KSS) and Limited Brands
(LTD) were up more than 2% ahead of November retail sales data set
to be released Friday morning.
Oil futures ended down 13 cents at a fresh two-month low $70.54
a barrel after briefly crossing below the key $70 level during
trading at the New York Mercantile Exchange. Crude has plummeted
10% over its recent slide, with many traders bracing for a
continued flow of sell orders.
"There is some support at $68 a barrel, but nothing really
strong until $65," said broker Tom Bentz, at BNP Paribas in New
York. He noted that Wednesday's sharp fall came as trading volume
in crude topped 1 million contracts for the first time since
February.
A Thursday report from the Labor Department showed a
bigger-than-expected weekly rise in U.S. filings for jobless
benefits, though the number of continuing claims, defined as claims
lasting more than one week, showed a decline. .
"What we're seeing here is consistent with our expectations that
we'll actually begin to see growth in [monthly] payrolls early next
year, which is a great positive for the market," said portfolio
manager Bill Stone, of PNC Advisors. "You have to be careful with
the claims data, since they're prone to blips as people come on and
off the rolls. That's why people tend to pay more attention to the
moving averages."
The initial-claims data followed last week's surprisingly strong
report on November nonfarm payrolls, which showed that the U.S.
economy has almost ceased shedding jobs.
However, some traders remain concerned about the cumulative
effect of millions of job losses from the recent recession. With
Thursday's gains so far, the Dow is up just 60 points since last
week's release of better-than-expected monthly payroll data.
"All of the little shimmers of hope that we have gotten in the
data haven't been able to drive prices higher with any
consistency," said Chris Johnson, chief executive of Johnson
Research Group, a trading and analysis firm in Cincinnati. "It just
shows you there's still a lot of hesitance out there. We see a
market that's just as willing to sell on the news as buy the
news."
In other economic news, the Commerce Department reported that
the U.S. trade deficit narrowed by 7.6% to $32.9 billion in
October. Imports rose by 0.4%, suggesting a somewhat improved
demand picture domestically. .
Despite the broad gain in stocks, trading volume was light, with
New York Stock Exchange composite turnover hitting 4.2 billion
shares, well shy of the 2009 daily average.
Investors will be paying close attention to a policy statement
from the Federal Reserve when it determines interest rates next
week.
Treasury prices slipped following a poorly bid auction of
30-year government debt. The 10-year note was off 14/32 to yield
3.484%.
The dollar rose against the euro and Japanese yen, but lost
ground against the Australian dollar and Canadian dollar. The U.S.
Dollar Index (DXY)was recently flat.