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Retail, tech lead Wall Street rally before jobs data

Retail, tech lead Wall Street rally before jobs data
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First Published: Fri, Jul 08 2011. 08 57 AM IST
Updated: Fri, Jul 08 2011. 08 57 AM IST
New York: US stocks closed sharply higher and the Nasdaq notched an eighth day of gains on Thursday as improved labor market and retail sales data added to optimism a day before the critical June payrolls report.
Equities have been on a tear recently as improving economic data and a potential resolution to Greece’s fiscal issues paved over fears of slowing growth and contagion stemming from the euro zone’s debt crisis.
The Nasdaq’s 8.3% gain over the past eight trading sessions is the most for the index in two years and the S&P’s 6.7% rise is its best since September 2010, as the market reacted to news of the Fed’s second round of stimulus. The Dow is up 6.6% over the same period.
“It’s all about the data today, which was great, and is causing people to revise their outlooks up for tomorrow,” said Jeffrey Friedman, senior market strategist at Lind-Waldock in Chicago. “We passed through a resistance level of 1,352 on the S&P, and the next stop after that could be new highs for the year.”
All 10 S&P sectors rose, led by materials, which gained 1.5%, while Freeport McMoRan Copper & Gold climbed 3.7% to $55.49.
Both the S&P retail index and the Dow Jones Transportation Average hit all-time highs.
Data from payrolls processor ADP showed US private-sector employers added 157,000 jobs last month, more than double what was expected. The report, coupled with a fall in new claims for jobless benefits, raised hopes that a recent slowdown in the economy may only be temporary.
The report fueled speculation that Friday’s non-farm payrolls report from the Labor Department would provide more evidence of an improving labor market, a key factor if markets are to rally into the end of the year.
The Dow Jones industrial average shot up 93.47 points, or 0.74%, to 12,719.49. The Standard & Poor’s 500 Index gained 14 points, or 1.05%, to 1,353.22. The Nasdaq Composite Index climbed 38.64 points, or 1.36%, to 2,872.66.
The market’s rally has some analysts calling for a near-term pullback.
“I can’t make a case from this rally that we’re home clear,” said James Meyer, chief investment officer of Tower Bridge Advisers in West Conshohocken, Pennsylvania. “We’ve gone from the bottom of the range to the top, and I suspect trading will be choppy around here.”
Retailers were among the best performers after several top companies reported better-than-expected sales gains for June, using bargains to lure shoppers in an uncertain economy.
Target Corp jumped 6.7% to $51.67 while Macy’s Inc added 5.5% to $30.46 and Gap Inc gained 5.2% to $19.28. The S&P retail index gained 2.4% to close at 557.26, a new high.
Elsewhere, the semiconductor index rose 2.1% and added to the Nasdaq’s gains. Intel Corp, a Dow component, rose 2.1% to $23.23.
There were some glimmers of a potential compromise that would avoid a debt default as President Barack Obama and top congressional leaders searched for ways to break a deadlock over spending and taxes.
Volume was light again, with about 6.69 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 8.47 billion.
Almost four stocks rose for every one that fell on the New York Stock Exchange while on the Nasdaq, three stocks rose for every one that fell.
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First Published: Fri, Jul 08 2011. 08 57 AM IST
More Topics: Markets | Wall Street | S&P | US stocks | Oil |