Stocks Log Third Straight Gain; Citigroup Soars
Stocks extended their winning streak for a third straight day Thursday after a slew of economic data, including an encouraging report on manufacturing.
Plus, Chinese stocks, which had dragged down global markets earlier this week, rebounded 4.5 percent.
The Dow Jones Industrial Average rose 70.89, or 0.8 percent, to close at 9,350.05. The Dow has gained more than 200 points, or 2.4 percent, in the past three sessions.
The S&P 500 and Nasdaq each gained more than 1 percent today, bringing their three-day totals to about 3 percent.
US stocks had initially opened lower today, after a surprise jump in jobless claims. Then they got a bump from the Philadelphia Federal Reserve's report on manufacturing, and traders focused on the positive news.
The Labor Department reported that initial claims for state unemployment insurance benefits rose by 15,000to a seasonally adjusted 576,000last week; economists polled by Reuters had expected to see a drop to 550,000.
And mortgage delinquencies continued to climbin the second quarter, though the percentage of loans that slipped into foreclosure eased slightly, the Mortgage Bankers Association reported. Nearly one in eight homeowners are now delinquent or in the foreclosure process, the MBA reported.
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Freddie Mac reported that the 30-year fixed-rate mortgage averaged 5.12 percent this week, down from 5.29 percent last week. Last year at this time, the 30-year fixed averaged 6.47 percent.
The recession showed more signs of easing this summer: Leading indicators rose 0.6 percent in July, as expected, according to a report from the Conference Board reported. And the Philadelphia Federal Reserve branch said its gauge of manufacturing activity in the region rose to 4.2 in August from minus-7.5 in July.
Financials were some of the day's biggest gainers, with Citigroup up 8.5 percent amid buzz that the stock could triple in the next three years.
Bank of America and JPMorgan gained more than 2 percent.
AIG shot up 22 percent after incoming CEO Robert Benmosche told Bloomberg that the troubled insurer may be able to repay loans from the government, though he didn't specify a timeframe.
Sears Holdings shares tumbled 12 percent after the department-store operator missed earnings expectationsamid weak sales.
But ketchup maker H.J. Heinz and Spam maker Hormel Foods both beat expectations.
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Google was up about 3 percent after Goldman Sachs added it to its "conviction buy" list, saying revenue growth could return to the high teens over the next four quarters.
World stock markets rose, with China erasing its troubling 5 percent drop from the previous day. The British, German and French markets each gained at least 1.4 percent.
After the bell, investors will get quarterly numbers from retailer Gap and software publisher Intuit .
In a development that may or may not impact oil trading, Hurricane Bill has been downgraded to a Category 3 storm, although hurricane watchers say it does have the potential for an upgrade back to Category 4.
Oil prices started the day lower but settled above $72 a barrel.
And several reports say the White House will trim its budget deficit forecast for the current fiscal year next week—cutting the projected shortfall by about $262 billion to $1.58 trillion. However, that would still be a record.
The lower number would come from the erasure of a contingency fund that had been set aside for more Wall Street bailouts, which will now apparently not be needed.
Still to Come:
THURSDAY: Earnings from Gap, Intuit after the bell
FRIDAY: Existing-home sales; Earnings from JM Smucker
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