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Global Rally Spurs Wall Street

Robert Holmes

Stocks in the U.S. surged early following upbeat sessions overseas, then survived a brief afternoon scare before managing to close moderately higher.

The Dow Jones Industrial Average rose more than 100 points during the morning before losing momentum. Around 2:30 p.m. EST, it showed a gain of only around 30 points. However, the Dow recovered and finished up 68.25 points, or 0.56%, at 12,260.70.

The S&P 500 rose 9.92 points, or 0.71%, to 1401.89, and the Nasdaq Composite climbed 13.09 points, or 0.55%, at 2387.73.

Twenty-six of the Dow's 30 components finished in positive territory, with Verizon (VZ Quote), AT&T (T Quote), American Express (AXP Quote) and Honeywell (HON Quote) leading the gains.

The tech-heavy Nasdaq, meanwhile, benefited from rises in KLA-Tencor (KLAC Quote), Nvidia (NVDA Quote), Sirius Satellite Radio (SIRI Quote) and Akamai Technologies (AKAM Quote).

Many subdivisions of the market improved. The Philadelphia Semiconductor Sector Index climbed 1.8%, the NYSE Financial Index gained 1%, and the Philadelphia Housing Sector Index was higher by 0.6%.

About 3.03 billion shares changed hands on the New York Stock Exchange, where advancers beat decliners by an 8-to-3 margin. On the Nasdaq, volume reached 1.75 billion shares, as winners outpaced losers 3 to 2.

Last week, stocks took a nosedive amid a massive selloff around the world, but the major indices are performing better this week. Over the past four session, the Dow is higher by 1%, the S&P 500 has risen 1.1%, and the Nasdaq has added 0.8%.

"We're trading very well today on tempered optimism," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "We've had sideways trading for the last few days, and after stabilizing we're now higher ahead of tomorrow's employment number."

The Labor Department will post February's jobs data on Friday at 8:30 a.m. EST. Economists expect that the U.S. economy added 100,000 workers last month.

In the final report before the jobs data, the Labor Department said that initial jobless claims fell by 10,000 last week to 328,000. The less volatile four-week moving average rose by 4,750 to 339,000.

"Today's jobless claims number doesn't change our view on tomorrow's payroll number, which is good," said Art Hogan, chief market analyst with Jefferies. "The number was in line with expectations, so tomorrow's nonfarm payrolls number shouldn't stray too much from expectations. Friday's report will return our focus to fundamentals, away from global markets, which is what we need to do."

The global markets helped spur Wall Street's buying Thursday, as bourses across Asia posted solid gains overnight. China's Shanghai and Shenzhen 300 Index climbed 1.5%. Hong Kong's Hang Seng was up 1.4%, and Tokyo's Nikkei 225 was ahead by 1.9%.

Europe was also on the ascent, with London's FTSE 100 better by 1.2% and Frankfurt's Xetra DAX up 1.4%. The Cac 40 in Paris rose 1.3%.

"Global markets look to be stabilizing, which should put us back in a positive trend," said Hogan.

Headlining the U.S. session were the nation's retail stores, which posted their February sales results. The world's biggest retailer, Wal-Mart (WMT Quote), said same-store sales rose an anemic 0.9% in February. Analysts had expected Wal-Mart to post a 1.5% rise, and the stock finished down 5 cents, or 0.1%, at $47.88.

On the other hand, rival Target (TGT Quote) beat expectations after posting a 5.7% increase in same-store sales last month. The retailer said it expects March comp sales to surge 11% to 13% because of the earlier Easter holiday. Target gained $1.09, or 1.8%, to $61.69.

Among others, Pier 1 (PIR Quote) said its February comparable sales dropped 8.4%. Same-store sales were down 5.7% at Pacific Sunwear (PSUN Quote).

Limited's (LTD Quote) comps were up 3% last month, while Gap (GPS Quote) posted a better-than-expected 4% decline.

Both Costco Wholesale (COST Quote) and Federated Department Stores (FD Quote) reported same-store sales growth that came in below estimates, while Nordstrom (JWN Quote) blew away the forecast.

As for earnings, TiVo (TIVO Quote) posted a narrower-than-expected fourth-quarter loss after the prior close, but still traded lower. TiVo fell 5 cents, or 0.8%, closing at $6.09.

Later, homebuilder Hovnanian (HOV Quote) is expected to report a fiscal first-quarter loss of 69 cents a share, according to Thomson First Call. Hovnanian was 0.3% higher ahead of the report, up 8 cents at $30.48.

On the research front, Ford (F Quote) was lifted to neutral from underperform at Credit Suisse. Ford rose 31 cents, or 4.1%, to end at $7.93.

At the New York Mercantile Exchange, energy futures were falling. Crude oil was down 18 cents to close at $61.64 a barrel, and natural gas was off 12 cents at $7.24 per million British thermal units.

Metals prices inched higher. Gold rose $2.60 to close at $655.50 an ounce, and silver tacked on 1.5 cents at $13.12 an ounce.

Bond prices were under pressure. The 10-year note was down 10/32 in price, yielding 4.52%, and the 30-year was losing 15/32 to yield 4.66%.