Stocks Snap Four-Day Losing Streak

Stocks snapped their four-day losing streak Thursday as investors were encourage by some better-than-expected retail-sales reports. Bank, gold and retail stocks shares advanced.

"It's the belief the economy is in the recovery stage. What's rallying today are things associated with economic growth," Owen Fitzpatrick, head of U.S. Equity Group, Deutsche Bank Private Wealth Management, told Reuters. "Granted, we're due for a pause, but the reality is we are in an economic recovery."

The Dow Jones Industrial Average rose 63.94, or 0.7 percent, to close at 9,344.61. The S&P 500 and Nasdaq each gained 0.8 percent.

For sure, it was a wobbly session: The Dow crossed the zero mark 26 times.

Costco , Target and Gap were among the retailers that beat expectations.

Costco shares soared 8.6 percent, while Target gained 1.7 percent and Gap advanced 7.6 percent.

But it wasn't all rosy: Abercrombie and Fitch missed its target with a 29-percent drop in sales as teen retailers continued to get hammered. Family Dollar also missed its target. Both stocks declined.

Financials rebounded after taking a beating on Wednesday. Bank of America was one of the biggest gainers on the Dow, climbing 3.5 percent. Citigroup and Wells Fargo also posted solid gains.

CIT Group rose 5.6 percent and AIG jumped 10 percent.

Fannie Mae advanced 20 percent, while Freddie Mac gained 14 percent.

And gold stocks were shining once again as gold hit a six-month high of $995.80 a troy ounce.

Randgold Resources and Royal Gold added another 8 and 7 percent respectively, bringing their two-day total to nearly 20 percent.

"When you have such a large part of US population convinced we're running to hell in a handbasket with federal spending, you're going to have a large part of the population buying and taking possession of gold out of fearof what's going on," said Jim DiGeorgia, commodities analyst for Gold and Energy Advisor.

The Crisis: 1 Year Later - A CNBC Special Report - See Complete Coverage
The Crisis: 1 Year Later - A CNBC Special Report - See Complete Coverage

In the day's economic news, the ISM reported its service-sector index rose to 48.4in August from 46.4 in July, slightly beating expectations but still at the 50 mark, which would indicate expansion in the sector.

But investors were slightly disappointed in the report, hoping the gauge would top 50 after the ISM's manufacturing gauge topped the 50 mark earlier this week.

"While clearly signaling economic conditions that are nowhere near as bad as late last year ... we do not expect this [service-sector] indicator to flash a sustained 'all-clear' signal anytime soon," Joshua Shapiro, chief U.S. economist at MFR Inc., wrote in a note to clients. "Indeed, the less impressive recovery in this index compared to the ISM manufacturing index underscores the inventory-led nature of the current economic bounce."

One market pro said the fundamentals of this economy are actually creating a bit of a "perfect storm."

"I'd say we're within 5 to 10 percent of the peak" of this market, said Jeff Seymour, managing director of Triangle Wealth Management. Investors are getting discouraged and losing confidence in stocks, Seymour said, as earnings continue to disappoint, unemployment continues to climb and consumers continue to rein in spending.

Seymour is currently short the S&P, long international equity, and also investing in gold and short-term bonds.

Investors got a report on the labor market today ahead of the big jobs report on Friday.

Initial jobless claims fell 4,000 last week, roughly in-line with estimates, but the market was shaken a bit by a revision to the prior month and uptick in the four-week moving average.

As for Friday's jobs report, economists expect to see that 233,000 jobs were lost, slightly fewer than the 247,000 lost in July, and that the unemployment rate ticked up to 9.5 percent.

Volume was light, with 1.16 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, roughly 23 to 6.

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