Recovery Hopes Boost Stocks; Techs Drag
Stocks advanced Thursday as a trio of encouraging economic reports — the Philadelphia Federal Reserve's manufacturing report, leading indicators and weekly jobless claims — fueled recovery hopes.
But tech stocks retreated, dragging on the Nasdaq, while the Dow and S&P enjoyed more robust gains.
The Philadelphia Fed's index of manufacturing conditions in the region improved to minus-2.2in June from minus-22.6 in May, the best reading since September 2008 when the index was in positive territory and far better than the minus-17 economists had expected.
Meanwhile, leading indicators rose for a second straight month, climbing 1.2 percent in May after a revised 1.1-percent gain in April, the Conference Board reported. The May gain was the largest since a 1.4-percent increase in March 2004.
"The recession is losing steam," Ken Goldstein, an economist for the Conference Board said in a statement. "Confidence is rebuilding and financial market volatility is abating."
And the weekly jobless-claims report showed initial claims nudged higher to 608,000 but continuing claims, which more broadly reflect job trends, dropped for the first time since January.
Today's session is the mirror image of Wednesday's: Tech and consumer stocks are lower today, after gaining in the prior session. And banks rebounded after Wednesday's slide.
Treasury Secretary Tim Geithner was on Capitol Hill today, urging Congress to move quickly on the Obama administration's financial reforms.
After considering a wide range of options, the administration "decided that now is the time to pursue the essential reforms, those that address the core causes of the current crisis; and that will help to prevent or contain future crises," Geithner told the Senate Banking Committee.
Geithner's testimony before the House Financial-Services Committee, originally slated for 1:30 pm ET today, was postponed.
Financials rebounded after the prior session's slide after Standard & Poor's downgraded its credit rating on 18 banks in the sector, including Wells Fargo , and lowered its outlook on another four. including PNC Financial .
The regulatory reform is expected to impact more than banks, extending to companies like CNBC parent General Electric .
Research In Motion skidded ahead of earnings from the BlackBerry maker, due out after the closing bell.
Shares of iPhone maker Apple rose.
Chip stocks were among the biggest tech decliners, with Intel off more than 1 percent and AMD off more than 5 percent.
Microsoft and Google had a war of words over a new Google software, the Wall Street Journal reported.
Perhaps the most surprising news of the day was that struggling imported-goods retailer Pier 1 posted a profit. Its shares jumped more than 5 percent.
Another stock to watch is movie studio Lions Gate, with investor Carl Icahn upping his stake in the company to 16.9 percent.
Still to Come:
THURSDAY: Earnings from Research In Motion
FRIDAY: Quadruple witching
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