Stocks rise as lackluster reports ease Fed concern
By The Associated Press
Published: Thursday, May 30, 2013, 5:15 p.m.
NEW YORK — The stock market rose Thursday after a pair of lackluster economic reports raised expectations that the Federal Reserve will continue to boost the economy with its stimulus program.
Unemployment claims rose and an initial estimate of first-quarter economic growth was revised slightly lower. That suggests the economy may need more time to recover from its funk and that the Fed will keep up its $85 billion in monthly bond purchases.
“The big worry that's been hitting the market lately, that the Fed might step back prematurely, might be fading a little today on the idea that the economy does need a bit more support,” said Jeff Kleintop, chief market strategist at LPL Financial.
The rise in the Standard & Poor's 500 index was led by banking and insurance stocks, which gained 1.1 percent. Among individual bank stocks, Bank of America rose to its highest in more than two years. JPMorgan also climbed.
Banks and other stocks that stand to benefit the most from an improving economy have surged this week, a change from earlier in the year when investors favored dividend-rich stocks like utilities. Now investors are selling dividend-rich stocks and buying so-called growth stocks. The S&P's financial index is up 2.1 percent this week; its utilities index is down 2.5 percent.
Even after this week's gain, by one measure bank stocks are still less expensive than the broader market. The price-to-earnings ratio for financial companies is 14.4 for banks and insurers, compared with 16.2 for all companies in the S&P 500 index, according to FactSet.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Consider carefully details, people involved in financial trust
- Is tech wreck on way?
- More women seize opportunities to start businesses
- ‘Sweet spot’ mid-cap stocks worthy of investor affection
- Meat prices drain barbecue budgets
- Investment in Western Pa. startups reaches 5-year high
- Wages have soared in Pittsburgh, but economy appears to have stalled
- Pa. unemployment rate falls to lowest since 2008; 12,000 more enter workforce
- Consol Energy transitions as leadership changes hands
- Lawsuit challenges Hollywood standard of unpaid internships
- Low pay, commutes among top stressors