Better than expected data on retail sales and jobless claims lifted market sentiment Thursday. Oil and gold prices climbed
U.S. stocks closed higher Thursday, bolstered by a rise in commodities prices, and better than expected data on retail sales and jobless claims that supported investors' hopes for an economic recovery. A successful auction of $11 billion in 30-year Treasury notes also boosted sentiment.
Higher oil and gold prices lifted energy and mining stocks. Issues tied to consumer staples and technology also performed well.
However, indexes pared gains in late trading as investors took some profits off the table.
On Thursday, the 30-stock Dow Jones industrial average finished higher by 31.90 points, or 0.37%, at 8,770.92. The broad Standard & Poor's 500-stock index was up 5.74 points, or 0.61%, at 944.89. The tech-heavy Nasdaq composite index added 9.29 points, or 0.50%, to 1,862.37.
Treasury notes and bonds rallied following the
successful completion of the 30-year auction. The the 10-year notes jumped 24/32 in price to 93-00/32 for a yield of 3.864%, while the 30-year bond rose 40/32 to 92-00/32 for a yield of 4.694%.
The dollar index reached session lows of 79.40 following comments from the Atlanta Fed President Dennis Lockhart, who said the dollar's role as a reserve currency may decline on a relative basis over time.
August gold futures were up $2.40 to $957.10 per ounce.
Crude oil futures for July delivery rose above $73
per barrel, before retreating to about $72.66, up $1.33 in afternoon trading after news that the International Energy Agency, in its June report, rose its global oil demand forecast to 83.3 million barrels per day this year, up from 83.18 million barrels in the May report.
Major indexes in Europe finished with gains, with London up 0.57%, Paris higher by 0.59%, and Frankfurt gaining 1.11%. Asian markets ended mixed, with Tokyo stocks falling 0.10%, Hong Kong up 0.03%, and Shanghai lower by 0.67%.
In the financial sector Thursday, a brokerage upgrade on Bank of America (BAC) helped boost its shares early.
Handheld PDA maker Palm (PALM) meanwhile benefitted from an upgrade from BofA analysts relating to its new Pre handset.
In economic news Thursday, U.S. business inventories fell 1.1% in April, while sales dipped 0.3%. The 1.0% inventory decline from March was revised down to -1.3%. The 1.6% sales drop in March was revised down to -1.8%. Retailer inventories declined 1.0%. The inventory-sales ratio slipped to 1.43 from 1.44.
U.S. retail sales rebounded 0.5% in May, while the ex-auto component rose 0.5%. April's -0.4% print was revised higher to -0.2%, while March's -1.3% was revised to -1.2%. The -0.5% April ex-auto component was revised up to -0.2%, and March's -1.2% was revised up to -1.1%. May's rebound breaks a string of two consecutive monthly drops. Excluding auto, gas, and building materials, sales were flat following a 0.1% decline in April (revised from -0.3%).
U.S. initial jobless claims fell 24,000 to 601,000 in the week ended June 6 and better than the 613,000 that markets had expected. The four-week moving average fell to 621,750 from 632,750. Continuing claims surged 52,000 to 6,816,000 from an upwardly revised 6,757,000 (was 6,735,000). The insured unemployment rate held at 5.1%. While the release was better than expected, the claims data remain elevated, though well below the 27-year high of 674,000 hit during the week ended March 28.
After hitting a record high of more than 342,000 in April, U.S. foreclosure activity backed down 6% in May, with 321,480 properties receiving a foreclosure filing during the month, according to the RealtyTrac U.S. Foreclosure Market report. That was still up nearly 18% from May 2008. However, the year-over-year change doesn't seem so bad in light of the increases of 50% or more that were common in 2008. Helping to lower the overall rate of increase were the real estate owned (bank repossession) category, which decreased 24% from May 2008, while default notices rose 9% and scheduled auctions increased 78%, said RealtyTrac, an online marketplace for foreclosure properties.
Bloomberg reports that the International Monetary Fund, which has rescued countries from Iceland to
Pakistan in the past year, raised its forecast for global growth in 2010 to 2.4%, according to a person familiar with the matter. The news agency notes that the IMF, the Washington-based lender with 185 member nations, said in April that it expected the world economy to grow 1.9% next year. In its World Economic Outlook released in April, the IMF predicted a 1.3% rise this year.