Hiring, spending propel Wall Street
NEW YORK — Good news about hiring and spending at retail businesses helped send the stock market sharply higher on Thursday.
For investors, the pair of government reports offered more encouragement that the nation's economic recovery will continue, even as Europe and Japan struggle. The Standard & Poor's 500 index soared 23.84 points, or 1.5 percent, to 1,636.36.
The gains were broad. All 10 industry groups within the S&P 500 rose, led by retailers and other consumer-discretionary companies. Gannet soared 34 percent, the most in the S&P 500, on news that it would buy another media company, Belo.
“The underlying fundamentals of our economy are clearly doing much better,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Mass.
Markets have been turbulent over the past three weeks. The S&P 500 climbed 17 percent from the start of the year to May 21 when it hit an all-time high of 1,669. The index began sliding the next day when the Federal Reserve said it would consider pulling back its support for the economy this year.
It's been a bumpy ride since. The index has fallen as low as 1,608, a trading range of 3.6 percent.
Investors have been debating when the Fed will begin cutting back its bond purchases and worrying about the effect. They could get a better sense next Wednesday, when the bank releases its policy statement and Fed Chairman Ben Bernanke holds another press conference.
“A lot of investors are worried about the Fed,” said Bob Baur, chief global economist at Principal Global Investors in Des Moines, Iowa. “That's going to create a bumpy market at least until they get some clarity on that. But we really think the U.S. is in pretty good shape.”
Baur thinks the economic recovery will pick up speed later this year, which could help push corporate earnings and the stock market higher.
The latest positive news broke early Thursday when the government said the number of Americans seeking unemployment benefits fell 12,000 to 334,000, below what economists had expected. Jim O'Sullivan, chief U.S. economist at High Frequency Economics, wrote in a note to clients that the government's weekly numbers, while volatile, “continue to signal an improving labor market.”
The government also reported that national retail sales increased 0.6 percent in May from April. That was up from a 0.1 percent gain in April and the fastest pace since February.
The Dow Jones industrialHiring average rose 180.85 points, or 1.2 percent, to 15,176.08. The Nasdaq composite rose 44.93 points, or 1.2 percent, to 3,445.36.
In Japan, the benchmark Nikkei 225 index slumped 6.4 percent as doubts grew that Prime Minister Shinzo Abe's economic turnaround plan will succeed. The Japanese market is down 20 percent from a high reached May 22, the definition of a bear market.
That decline followed an extraordinary surge from mid-November to late May. The Nikkei soared 80 percent as investors hoped Japan would finally emerge from its two-decade economic slump.
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.
- Chevron settles fatal well fire lawsuit for $5 million
- IRS cybersecurity breach touches lives of homebuyers, others
- Task force to plot ways of easing gas glut in Pennsylvania via pipelines
- Pitt study suggests health law attracting young to balance insurers’ risks
- UPMC offering buyouts to 3,500 employees in cost-cutting move
- Automakers do U-turn on infotainment systems
- Shoppers pay premium for organic chicken
- Apple finds bug that causes iPhones to crash
- Stocks bounce back from losses on reassurance from Greece
- Many Americans have no retirement savings, Fed survey shows
- Tesla home battery at $7K, partnered with rooftop solar system, may help reduce power bills