Positive jobs data boosts Wall Street
US STOCKS gained yesterday after a recent small pullback as data on the jobs market and regional manufacturing revived hopes that the recession-hit economy is stabilising.
Government data showed that while the amount of workers filing new claims for jobless benefits rose last week, the number of people collecting aid after the first week fell for the first time since January.
And manufacturing in the US Mid-Atlantic region in June contracted much less than expected, and less than in the previous month. Economic optimism has spurred stocks as much as 40 per cent from 12-year lows, but analysts have said signs of real improvement will be needed to sustain the rally.
Chief investment officer at LPL Financial Burt White said: “The velocity of the bad news is slowing down, which lends a backdrop for equities to move higher.” Financial and healthcare stocks led the way higher. Lincoln National was up 7.4 per cent at $16.00 after an upgrade from Credit Suisse, and the KBW insurance index rose 1.9 per cent. The S&P financial index gained 2.5 per cent.
The Dow Jones industrial average gained 86.01 points, or 1.01 per cent, to 8,583.19. The Standard & Poor’s 500 Index rose 10.49 points, or 1.15 per cent, to 921.20. The Nasdaq Composite Index added 6.66 points, or 0.37 per cent, to 1,814.72.
Today marks the end of the two-day quadruple witching period, referring to the expiration and settlement of June stock and index futures and options, which may increase volatility. In the mid-afternoon, the CBOE Volatility Index was down 5.3 per cent and below the psychologically important 30 level.
Shares of healthcare companies and other defensive names, deemed better positioned to withstand a still uncertain economy, also buoyed the market. Merck & Co jumped 4.3 per cent to $25.84, while McDonald’s gained 2.2 per cent to $58.64.
On the downside, Caterpillar shed 1.9 per cent to $34.14 after the heavy machinery maker said its retail sales of machines had fallen at a faster pace in May. After a nearly 4 per cent pullback over the past three sessions, the broad S&P 500 is up about 36 percent from March’s 12-year low.