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Business News/ Money / Dow, S&P end 3-day drop on data
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Dow, S&P end 3-day drop on data

Dow, S&P end 3-day drop on data

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New York: The Dow and S&P 500 gained on Thursday, breaking a three-day losing streak, as data on the job market and regional manufacturing revived hopes that the recession-hit economy is stabilizing.

After gaining as much as 40% from a 12-year closing low in early March, the S&P 500 has eased as investors reassessed the potential strength of an economic recovery. The day’s data revived optimism, but analysts said real improvement is needed to sustain the rally.

Financials supported the stock market after being among the week’s biggest drags. Discover Financial Services gained 4% to $9.27 after it reported a smaller-than-expected operating loss as bad loans grew less than anticipated.

Lincoln National rose 6.9% to $15.92 after an upgrade from Credit Suisse, and the KBW insurance index rose 1.8%. The S&P financial index gained 2.5%.

Data showed the number of people staying on jobless benefits fell for the first time since January, while manufacturing in the US Mid-Atlantic region contracted much less than expected in June.

“The data supports the case of those looking for the bottom of the economy in this quarter," said Jim Awad, managing director at Zephyr Management in New York.

The Dow Jones industrial average rose 58.42 points, or 0.69%, to 8,555.60. The Standard & Poor’s 500 Index gained 7.66 points, or 0.84%, to 918.37. The Nasdaq Composite Index was off just 0.34 of a point, or 0.02%, at 1,807.72.

The Nasdaq ended little changed as some big-cap technology companies fell.

Research In Motion fell 5.2% to $72.54 after the bell after its quarterly profit rose, but the BlackBerry maker gave an outlook that may disappoint some investors.

The stock had ended Nasdaq’s regular session at $76.55, down almost 1%.

Healthcare companies and other defensive names - deemed better positioned to withstand a still uncertain economy - also buoyed the market. Merck & Co Inc jumped 3.6% to $25.65.

“People are hedging their bets by saying we’re going to stay in, but stay in defensively to protect their gains," said Awad.

Friday 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. The CBOE Volatility Index was down 4.8%, but slightly above the psychologically important 30 level.

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 initial week marked its biggest decline since November 2001.

Though regional manufacturing contracted in June, it was far less severe than the previous month, adding to stabilization hopes.

After a nearly 4% pullback over the past three sessions, the broad S&P 500 is up 35.7% from its 12-year closing low on 9 March.

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Published: 19 Jun 2009, 08:36 AM IST
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