New York: US stocks ended little changed on Thursday as equity markets around the world capped their best monthly gain in years after fresh US economic data kindled hopes that a deep recession is almost over.
US government bond prices were steady as the perception that the longest recession since the Depression may end by late summer took greater hold, despite automakers Chrysler filing for bankruptcy.
While Chrysler’s bankruptcy filing saw US stocks give back gains seen earlier in the day, it also signaled that US President Barack Obama is prepared to play hardball with holdout lenders to protect the taxpayer.
“I don’t think anybody’s surprised. Bankruptcy is what they have been headed for in the past several months. Chrysler was too small to survive on its own,” said Mirko Mikelic, a portfolio manager at Fifth Third bank.
Investors in competing automakers reacted positively to the news, sending GM shares up 6.1% and Ford Motor Co up 9.7%.
The benchmark S&P 500 Index posted its best monthly gain by percentage point since March 2000, while MSCI’s all-countries world index climbed to it’s best monthly performance in more than a decade.
The S&P 500 is up 29% from the bear-market closing low set on 9 March.
For the session, the Dow Jones industrial average fell 17.61 points, or 0.22%, to 8,168.12 and the Standard & Poor’s 500 Index slipped 0.83 of a point, or 0.09%, to 872.81.
The tech-heavy Nasdaq Composite Index gained 5.36 points, or 0.31%, to 1,717.30.
Investors shrugged off a World Health Organization or WHO warning that a flu pandemic was imminent, and analysts said the health crisis might pass without any significant economic impact, leaving investors to focus on better-than-expected earnings and economic data.
Stocks gained wide support from profit reports from companies like Dow Chemical Co, which rose 18.4 percent at $16.00 after results handily beat estimates.
The number of US workers filing new claims for unemployment aid surprisingly fell last week, suggesting the pace of layoffs was easing, even though benefits rolls swelled to yet another record high in March.
A separate report showed business activity in the US Midwest contracted at a less severe rate in April as new orders for merchandise surged. While the Economic Cycle Research Institute said the US recession will probably end before summer is out.
European equities ended higher, as a key benchmark posted its best-ever monthly performance, driven by stronger-than-expected company earnings and hope that the market was bottoming out.
The FTSEurofirst 300 index of top European shares closed 1.5% higher at 828.62 points after hitting its highest level since mid-January.
The index gained more than 13% in April, its best ever monthly rise.
US Treasury debt prices were mixed after the Federal Reserve bought $3.025 billion in government debt as part of its plan to buy up to $300 billion in longer-term Treasuries within a six month time-frame. Since late March, the Fed has bought $76.8 billion in Treasuries.
The U.S. dollar edged up against major currencies, with the US Dollar Index up 0.15% at 84.771. Against the yen, the dollar <JPY=> rose 1.14% at 98.61. The euro was down 0.26% at $1.3228.
Oil rose as the reassuring US jobs data and upbeat corporate profits outweighed rising energy inventories and slumping demand. US crude rose 15 cents to settle at $51.12 a barrel. Brent crude rose 2 cents to settle at $50.80 a barrel.
US gold futures dropped 1.0% as a better tone of the economy dampened safe haven demand.