New York: US stocks rose modestly on Thursday after encouraging labour market data renewed optimism the fragile economic recovery was track, but gains were limited by a decline in the euro.
First-time claims for jobless benefits fell more than expected last week and the four-week moving average dropped to a two-year low. The government report was a positive sign after last week’s disappointing payrolls report.
“It gives us more confidence that the sloppy nonfarm payroll report was an aberration. So that number is going to be revised away, and we’ll be looking at a much stronger jobs picture with the December report,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.
The Dow Jones industrial average was off 8.10 points, or 0.07%, to 11,364.38. The Standard & Poor’s 500 Index added 1.62 points, or 0.13%, to 1,229.90. The Nasdaq Composite Index edged up 3.59 points, or 0.14%, at 2,612.75.
The three major indexes trimmed gains at midmorning as the euro fell to session lows after Ireland’s opposition Labour party said it will vote against a bailout package when it goes before parliament next week. Equities and the euro have moved in tandem of late, with the currency seen as a proxy for sovereign debt risk.
The Dow fared worse than the other indexes as DuPont and Co slipped nearly 2% to $47.96 after the company forecast 2011 earnings within expectations.
Analysts are betting the market will rally into year-end, though stocks may trade sideways in the short term after strong gains since the beginning of the month.
The S&P 500 rose above 1,228, a resistance level that represents the 61.8% Fibonacci retracement of the 2007-2009 bear market slide, a key technical indicator.
Orlando said if the S&P is able to break above 1,235, a two-year intraday high hit earlier in the week, the index could get to 1,250 or 1,260 by the end of the year.