Late Rally Lifts Dow Ahead of Jobs Data
NEW YORK (TheStreet) -- A very late session rally helped stocks finish with solid gains Thursday, as market participants began to shift their gaze toward Friday's much anticipated August jobs report.
The major indices were helped by broadly positive retail sales figures, a pickup in a pending-home sales measure, and a modest drop in new jobless claims.
But ignoring the session's final moments, stocks moved sideways for the vast portion of the day, with traders sitting on their hands, hesitant to make any definitive moves ahead of Friday's big data point. The market's defiant crawl higher in the final hour came even as early estimates provided by Briefing.com were calling for nonfarm payrolls to shed another 120,000 jobs last month and the nation's unemployment rate to tick up to 9.6%.
The Dow Jones Industrial Average finished up by 51 points, or 0.5%, at 10,320. The S&P 500 added 10 points, or 0.9%, at 1090, while the Nasdaq traded 23 points higher, or 1.1%, at 2200.After closing the books on their worst August since 2001, stocks kicked off September in fine style Wednesday. The Dow finished 255 points higher on upbeat economic data out of China and Australia, coupled with a surprisingly strong manufacturing report in the U.S. Thursday only extended those gains, helped by a select set of improving economic data points. While Wall Street is preparing for the jobs reading, Thursday offered investors another glimpse at weekly initial claims data, which have tracked higher in recent weeks. The Labor Department said new claims for unemployment benefits edged just lower by 6,000 to a seasonally adjusted 472,000 for the week ended Aug. 28. They were expected to rise by 2,000 from the prior week's pre-revised total at 473,000, according to Briefing.com. The number of those continuing on jobless benefit rolls also came in a hair lower to 4.456 million from 4.479 million. At the same time, the department also unveiled a revised look at worker productivity in the second quarter. Productivity declined at double the rate as initially reported, dropping at a 1.8% annual rate in the revised assessment. Wall Street was expecting a 1.7% fall. Unit labor costs also jumped 1.1%, as expected. A better-than-expected manufacturing readout helped fuel the market rally Wednesday. Market observers got another look at the sector Thursday as the Commerce Department said July factory orders saw a modest 0.1% gain. The showing follows a better revised 0.6% drop in June, though orders were projected to edge up 0.3% in July. But an assessment on pending-home sales in July came in stronger than hoped. Cobbled together by the National Association of Realtors , the group's index tracking the number of contracts for previously owned homes went higher by 5.2% in July. The measure was forecast to hold flat for the month, according to Briefing.com, though it still slumped 19.1% from last year. In a press statement, Lawrence Yun, chief economist for the NAR, also warned that "home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery." Elsewhere, Federal Reserve Chairman Ben Bernanke spoke Thursday before the Financial Crisis Inquiry Commission, which is charged with looking into the events leading to the financial meltdown.
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