Stock market brushes off poor jobs claims numbers
Stocks rebounded Thursday, ending a three-day losing streak for the Standard & Poor’s 500 index, as traders scooped up beaten-down financial and technology stocks despite a worse-than-expected weekly report on unemployment claims.
Financial stocks were the best-performing sector in the Standard & Poor’s 500 index, jumping 4% on average after tumbling 13% in the first three days of the week.
Regional banks showed some of the biggest gains, with Fifth Third Bancorp and Huntington Bancshares rising at least 7%.
Technology shares gained after software maker CA reported that its fiscal fourth-quarter earnings rose as cost cutting made up for a drop in revenue. CA shares climbed 5.5%.
The market advance came as investors grappled with another reminder of the strained job market. The Labor Department reported that initial claims for jobless benefits jumped to 637,000 in the latest week, above what economists had forecast.
The market fell sharply earlier in the week on concerns that the optimism that fed a massive spring rally might have been premature.
“Expectations got overblown, and the harsh unfortunate reality is that unemployment continues to climb and that consumers remain under pressure,” said Stuart Schweitzer, global market strategist at J.P. Morgan’s Private Bank.
“The green shoots of recent weeks are minor compared with the field of dandelions still present in the economy,” Schweitzer said.
The Dow rose 46.43 points on Thursday, or 0.6%, to 8,331.32. The S&P; 500 index jumped 9.15 points, or 1%, to 893.07, while the Nasdaq composite index surged 25.02 points, or 1.5%, to 1,689.21.
The Russell 2,000 index of smaller companies gained 1.9%.
More than two stocks rose for every one that fell on the New York Stock Exchange.
The S&P; 500 is down 3.9% this week, even after Thursday’s rally, but remains 32% above the 12-year low it hit in early March.
The market is “at a crossroads,” said Jack Ablin, chief investment officer at Harris Private Bank. “I’m looking for more evidence to say that this is a sustainable rally.”
In other market highlights Thursday:
* Ford Motor climbed 4% after its chief executive, Alan Mulally, said the automaker was slashing costs and boosting development of safe, fuel-efficient vehicles. Shareholders approved the company’s request to issue stock to help pay some of its healthcare obligations to retired autoworkers.
* Overseas, key stock indexes rose 0.7% in Britain, 0.2% in Germany and 0.1% in France. Shares in Japan fell 2.6%.
