Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

U.S. Stocks Bust Out of Three-Session Slump

06/13/2013 | 07:25am US/Eastern
Recommend:
0

NEW YORK--Stocks rallied Thursday as upbeat readings on the U.S. economy helped insulate against another steep drop in Japan.

The day's rally not only broke the first three-day string of declines for the Dow this year, but also marked a shift from recent weeks where strong economic news was seen as a negative for stocks because it could prompt the Federal Reserve to scale back on its efforts to ease monetary policy.

The Dow Jones Industrial Average gained 180.85 points, or 1.2%, to end at 15176.08. The blue chips notched their first advance of this week and more than wiped away a 127-point drop on Wednesday.

The Standard & Poor's 500-stock index tacked on 23.84 points, or 1.5%, to 1636.36. All 10 of the S&P 500's sectors gained ground, led by growth-sensitive consumer discretionary, materials and energy sectors. The Nasdaq Composite Index advanced 44.93 points, or 1.3%, to 3445.36.

For weeks, global markets have been gripped by concerns that the Fed may start winding down its asset-purchase program, feeding volatility that had been absent for much of this year's stock rally. Worries that the Fed might curtail its stimulus measures based on the pace of economic improvement led to an unusual pattern: positive readings on U.S. economic growth often translated to down days for stocks.

But on Thursday, investors took heart in a pair of better-than-expected readings on the U.S. economy. Retail sales rose 0.6% in May from the month earlier, topping expectations. Separately, initial claims for jobless benefits fell to 334,000 in the latest week from last week's 346,000, a deeper drop than forecast.

Regarding recent chatter that strong data might prompt the Fed to start tapering asset purchases sooner rather than later, which could hurt stocks, Dan Greenhaus, chief global strategist at brokerage firm BTIG in New York said simply: "Good data is good for stocks."

Stock gains accelerated late in Thursday's session after a The Wall Street Journal column suggested that Fed Chairman Ben Bernanke will try to calm investor fears about higher interest rates after next week's policy meeting.

After weeks of choppy trading, Kristina Hooper, head of investment and client strategies at Allianz Global Investors, said that markets appear more willing to embrace positive economic data in the U.S. on its face, rather than as a sign the Fed may pare back its stimulus efforts.

"We got better-than-expected jobless claims, better retail data, and the market reacted positively," Ms. Hooper said. "Investors seem to have come to the view that positive labor readings might not mean bad things" from the Fed, she said.

Japan's Nikkei Stock Average slid 6.4% overnight to enter so-called bear-market territory, down more than 20% from its May peak. A rally in the yen to two-month highs against the dollar triggered sharp losses in shares of export-oriented companies.

The recent volatility in Japanese markets, with the Nikkei running up 50% from the end of 2012 through May 22, then falling 20%, has fueled investor anxiety around the world.

Elsewhere in Asia, China's Shanghai Composite reopened from an extended holiday with a 2.8% decline.

European markets declined slightly, with the Stoxx Europe 600 falling less than 0.1%. It recovered from a decline of as much as 1.7% earlier in Europe's trading session.

Front-month July crude oil futures rose 0.8% to $96.69 a barrel, while June gold futures gave up 1% to $1, 377.60. a troy ounce. The dollar fell against the euro and the yen. Yields on benchmark 10-year Treasury notes fell to 2.178% as prices rose.

In corporate news, Belo soared 28% after the television company agreed to be acquired by Gannett for about $1.5 billion in cash. Gannett shares surged 34%.

Safeway jumped 7.4% after the grocery-store chain agreed to sell its Canadian operations to Empire Co. subsidiary Sobeys for 5.8 billion Canadian dollars, or about $5.7 billion.

Shares of beauty products maker Coty, whose perfume brands include Calvin Klein, fell 0.8% in its initial public offering valued at roughly $1 billion.

Write to Chris Dieterich at christopher.dieterich@dowjones.com

Recommend :
0
React to this article
Latest news
Date Title
1m ago GLAXOSMITHKLINE : China fines GSK $489m, jails executives
1m ago MICROSOFT : CEO set to visit China next week
2m ago U.S. Treasury's Lew calls for euro zone, Japan to do more on growth
2m ago DOW CHEMICAL : USDA Approval of New GMO Corn and Soy is a Step in the Wrong Direction
4m ago IGM FINANCIAL : Plan for fairer exchange gaining steam: CEO
4m ago WASION : Announcements and Notices - Clarification Announcement
4m ago MAGNA : Press Release - Magna Announces Cooperation Regarding Regulatory Investigation
4m ago JUST EAT : Brazilian business, RestauranteWeb, to merge with iFood, to create the online restaurant delivery winner in Brazil
4m ago NOVO NORDISK A/S : New Xultophy® (IDegLira) data show rapid and predictable glycaemic improvements in people with type 2 diabetes
4m ago OPEC ORGANIZATION OF PETROLEUM EXPORTING COU : daily basket price stood at $95.19 a barrel Thursday, 18 September 2014
Latest news
Advertisement
Hot News 
BANCO ESPIRITO SANTO : Swiss begin bankruptcy proceedings against Espirito Santo private bank
BAYER : plans huge float of its plastics business
RM2 : Posts First Revenue But Loss Widens
SYNGENTA : The Good Growth Plan on track one year after launch
VALNEVA : Welcomes the Texas A&M Inauguration of EB66®-Based Influenza Vaccine Facility in Texas, On Track for 2016 Start-up Phase
Most Read News
1d ago INTEL : Tapping the growing tablet market
1d ago HOME DEPOT : breach bigger than Target at 56 million cards
1d ago ORACLE : Ellison steps aside, co-CEOs Catz and Hurd take over
1d ago JETBLUE AIRWAYS : names former British Airways exec CEO, shares rise
1h ago Relief for Europe as Scotland stays put
Most recommended articles
1m ago U.S. Treasury's Lew calls for euro zone, Japan to do more on growth
4m agoDJASIA MARKETS : Nikkei Closes At Almost Seven-year High After Scotland Vote
6m ago BANCO ESPIRITO SANTO : Swiss begin bankruptcy proceedings against Espirito Santo private bank
12m agoDJASIA MARKETS : Nikkei Closes At Almost Seven-year High After Scotland Vote
13m ago UK markets welcome Scotland's rejection of independence
Dynamic quotes  
ON
| OFF