Stocks Snap Losing Streak as Techs Rise
Stocks snapped a two-day losing streak Thursday as banks rebounded and investors gave techs another go.
However, a pair of economic reports that missed expectations curbed gains.
The Dow Jones Industrial Average rose 46.43, or 0.6 percent, to close at 8,331.32. The S&P 500 gained 0.9 percent, while the Nasdaq advanced 1.5 percent. Volume was light.
This comes after stocks lost more than 2 percentWednesday as banks struggled and the government's reading on retail sales unexpectedly fell for a second straight month.
In Thursday's economic news, initial jobless claims rose by 32,000last week to 637,000, well above the 610,000 expected. But economists pointed out that auto-plant shutdowns inflated the number past expectations. The total number of people seeking unemployment benefits soared to another new record at 6.56 million.
Robert Brusca, an economist at Fact and Opinion Economics, noted that the recovery in jobless claims typically starts about eight weeks from the peak, and we're currently six weeks past peak. So, check back in two weeks.
Meanwhile, wholesale prices rose 0.3 percent in April, more than the 0.2 percent expected.
Wal-Mart reported first-quarter earnings of 77 cents a share, flat from a a year ago but in-line with expectations. The world's largest retailer was also on the same page with analysts with its projection for the current quarter's earnings. However, executives warned that they're cautious about an economic recovery until the employment situation improves. As a result, they're sticking with plan to market to consumers focused on being thrifty and trying to steer their eye past the grocery aisle.
Wal-Mart shares finished down 1.9 percent.
Tech stocks rebounded after taking a pounding recently, helping the Nasdaq best both the Dow and S&P 500.
Chip stocks rallied after Bank of America-Merrill Lynch raised its rating and price target on shares of chip-equipment maker Novellus , citing its attractive valuation.
Intel , Sandisk , Marvel and Xilinx all rose more than 2 percent, making them some of the biggest gainers in the Nasdaq 100.
The Philadelphia Stock Exchange semiconductor index rose 3.2 percent, breaking a five-session losing streak that shaved 11 percent off the index.
American depositary shares of Sony advanced 1.6 percent after the electronics giant reported a second straight quarterly loss but forecast a smaller-than-expected annual loss for the year ahead.
Shares of Digital Globe, a satellite-imaging company, soared 13 percent on their debuton the New York Stock Exchange. It was an encouraging sign, particularly since the stock was priced at $19, above the the expected range of $16 to $18. The IPO was the fifth in the U.S. this year.
Bank stocks were mostly higher, though Bank of America struggled.
JPMorgan was the biggest percentage gainer on the Dow, rising 4.4 percent, followed by Citigroup, which gained 4.1 percent. Bank of America started the day in the red, but eked out a gain of 2.7 percent for the fourth-place finish on the Dow.
Wells Fargo jumped 6.2 percent.
Cliffs Natural Resources lost another 5.1 percent after losing 20 percent Wednesday, when the iron-ore and coal miner said it was cutting its dividend by more than half, launching a public offering of 12 million shares and slashing executives' salaries in an effort to cut costs.
Oil and gas was the weakest sector after the International Energy Agency said world oil demand will post the sharpest annual decline since 1981 this year, sending crude prices below $57 a barrel.
Ford shares rose 4 percent after the automaker said it raised $1.6 billionthrough its latest stock offering. Ford is holding its annual meeting today in Wilmington, Del.
Chrysler told a bankruptcy court it plans to eliminate 25 percent of its dealershipsas part of its restructuring. This comes amid news that General Motors plans to cut 2,600 dealerships and start importing Chinese-built vehicles that were previously only for sale in Asia.
GM shares ended down 5 percent, making it the biggest percent decliner on the Dow.
A group of major banks is suing MBIA, charging that the bond insurer illegally restructured its operation by moving $5 billion of assets and leaving a key unit effectively bankrupt.
And U.S. regulators have recommended filing charges against Angelo Mozilo, the co-founder of Countrywide Financial, for insider trading, the Wall Street Journal reported late Wednesday.
Lehman Brothers , which filed for Chapter 11 bankruptcy in September 2008, is looking at spinning off its remaining assets, the Journal said in an unsourced article.
Still to Come:
FRIDAY: CPI; industrial production; consumer sentiment; Earnings from JCPenney, Abercrombie
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