Stocks End Higher Ahead of Jobs Report
Stocks backed off from their intraday highs, but still finished sharply higher Thursday after a pair of jobs news offered some hope that the employment picture was improving ahead of the critical government non-farm payroll report.
The Dow Jones Industrial Average jumped 93.47 points, or 0.74 percent, to finish at 12,719.49 , led by Cisco , JPMorgan and Intel .
Meanwhile, Pfizer fell after the drugmaker said it may sell or spinoff its animal health and nutrition units to focus on the pharmaceutical business. And IBM also lagged after Wells Fargo cut its rating on the tech giant to "marketperform" from "outperform."
The S&P 500 climbed 14 points, or 1.05 percent, to close at 1,353.22.
The tech-heavy Nasdaq added 38.64 points, or 1.36 percent, to end at 2,872.66, rallying for the eighth-consecutive session, but fell just short of a 10-1/2 year closing high.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to trade near 16.
Most S&P sectors ended higher, led by financials and materials.
Following a pair of robust jobs news in the morning, investors are now focusing on Friday's key government jobs report. Employers are expected to have added 90,000 jobs, according to a Reuters poll.
"One thing is an absolute: Tomorrow's number will influence hiring and consumer sentiment for the rest of the summer," said Todd Schoenberger, managing director of LandColt Trading. "Stocks have been on a tear, so traders may be more inclined to unload stocks following the number, even if it surprises on the upside."
Meanwhile, said Michael Sheldon, chief market strategist at RDM Financial Group said a better-than-expected jobs report could boost the S&P 500 from its recent trading range of 1,250 to 1,370.
"July has been a positive month [for stocks]...so if the employment data comes through positively as indicated by the ADP report today, we could see a push above the top end of the range in the next few weeks," said Sheldon.
Oil prices advancedafter a government report said crude oil inventories dropped by 889,000 barrels and following the robust jobs reports. U.S. light, sweet crude gained $2.02 to settle at $98.67 a barrel, while London Brent crude jumped $4.97 to settle at $118.59.
The energy sector also showed strength with Halliburton and Valero up more than 3 percent each. (Read More: The Big Options Play on Halliburton)
Most retailers climbed after chains reported June same-store sales that far outpaced expectations as consumers snapped up seasonal items on discount.
Limited Brands , Target and Macy's were among the biggest gainers while JCPenney declined.
Meanwhile, Urban Outfitters was among the top gainers on the Nasdaq 100 index for the second day in a row after Morgan Stanley boosted its rating for the clothing retailer to "overweight," citing possibilities for long-term profit growth.
JPMorgan climbed after the bank agreed to pay $228 million to settle allegationsthat some of its employees engaged in anticompetitive activity in the municipal bond investment market.
Visa hit a 52-week high after at least four brokerages raised their price targets on the firm. Rivals MasterCard and AmEx also rose after KBW raised its price target on both firms.
Western Digital climbed after JPMorgan raised its rating on the the hard drive maker to "overweight" from "neutral."
Starbucks and Yum Brands both slipped after Goldman Sachs downgraded the companies' ratings to "neutral" and "sell," respectively.
Some health insurers were in the red including WellPoint and Humana .
NYSE Euronext gained after the shareholders approved the merger with Deutsche Boerse.
Volume continued to be light with the consolidated tape of the NYSE at 3.54 billion shares, while 843 million shares changed hands on the floor. Volume is expected to remain thin amid the shortened trading week.
On the employment front, the private sector added 157,000 jobs in June, according to payroll processing firm ADP, far more than expected.
Meanwhile, claims for unemployment benefits slipped more than expected to a seasonally adjusted 418,000 in the previous week, according to the Labor Department.
President Obama said congressional leaders are still far from coming to a consensus on a wide range of budget issues but agree on the need to raise the U.S. debt ceiling, and will meet again on Sunday.
“A budget settlement could be worth 2 to 5 percent to the upside because a lot of people aren’t invested in this market,” John O’Donoghue of Cowen & Co. told CNBC.
European shares hit a five-week highafter a dip the previous day. Meanwhile, the ECB raised interest rates to 1.5 percent, as it continued to brush off concerns over slow growth and debt worries in the euro zone.
On Tap This Week:
FRIDAY: Non-farm payroll, wholesale trade, consumer credit
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