×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

US stocks drift on higher jobless claims, UPS outlook

US stocks drift on higher jobless claims, UPS outlook
Comment E-mail Print Share
First Published: Fri, Apr 16 2010. 12 54 AM IST
Updated: Fri, Apr 16 2010. 12 54 AM IST
New York: US stocks traded in a tight range Thursday after mixed economic reports gave investors an excuse to take a break from buying after five days of gains.
Analysts said a pause in the market’s upward push was overdue. The Dow Jones industrial average on Monday closed above 11,000 for the first time in a year and a half. Other major stock indexes have also climbed to their highest levels since 2008.
The Dow fell 8 points in afternoon trading. Broader indexes were mixed.
The Labor Department reported that initial claims for unemployment benefits rose unexpectedly for the second straight week. Figures on industrial production also fell short of expectations but did indicate growth for the ninth straight month.
An encouraging earnings forecast from UPS Inc. and stronger regional manufacturing reports offset some of the concern about the jobs figures.
UPS said late Wednesday that its per-share earnings rose 33% for the first quarter. The company raised its full-year earnings forecast because of an increase in international shipping. As the world’s largest shipping company, UPS’s results are seen as an early indicator of overall business activity.
UPS shares rose more than 5%.
Investors placed more bets on banks after JPMorgan Chase & Co. posted stronger earnings Wednesday. Shares of Citigroup Inc. rose above the psychological barrier of $5 for the first time since October.
A second straight week of weak employment numbers kept stocks in check. The government said first-time claims for jobless benefits rose by 24,000 to 484,000 last week, the highest level since late February. Economists polled by Thomson Reuters forecast a drop to 440,000, on average.
The stock market has been surging higher after major stock indexes hit 12-year low in March last year. Growing expectations for a recovery have been driving the climb. The increases in the past two months have been more subdued, with fewer big moves.
Charlie Smith, chief investment officer at Fort Pitt Capital in Pittsburgh, said the market’s steady advance is welcome because it means investors aren’t getting overly optimistic.
“We are seeing a straight line (higher) but there’s not a whole lot of exuberance to it,” he said. “There is a tremendous amount of skepticism about the market and that’s a good thing.”
In midday trading, the Dow fell 8.24 points, or 0.1%, to 11,114.87. The S&P 500 slipped 0.22 points, or 0.2%, to 1,210.43, while the Nasdaq composite index rose 6.12 points, or 0.2%, to 2,510.98.
Bond prices rose, pushing their yields lower. The yield on the benchmark 10-year Treasury note fell to 3.83% from 3.87% late Wednesday.
The dollar and gold both rose.
The Federal Reserve said industrial production rose 0.1% in March. Despite the continued growth, the number fell short of analysts’ expectations. Economists predicted production at America’s factories, mines and utilities would rise 0.7% in March.
The New York Federal Reserve’s Empire State Manufacturing Survey rose more than expected for April. A similar snapshot of regional manufacturing from the Philadelphia Federal Reserve also signaled that conditions are improving.
Among stocks in the news, UPS rose $3.74, or 5.7%, to $69.19.
Citigroup fell 5 cents, or 1%, to $4.88 after trading as high as $5.07.
Google Inc. rose $5.29 to $594.29. The Internet search company is expected to report quarterly earnings after the closing bell.
Four stocks fell for every three that rose on the New York Stock Exchange, where volume came to 486.4 million shares, compared with 444.4 million traded at the same point Wednesday.
The Russell 2000 index of smaller companies fell 1.01, or 0.1%, to 721.39.
Comment E-mail Print Share
First Published: Fri, Apr 16 2010. 12 54 AM IST
More Topics: Stocks | Shares | Markets | Dow Jones | S&P 500 |