Dow Surges 400 Points After Cisco Jumpstart, Jobs Data
NEW YORK (TheStreet) -- Stocks soared Thursday, extending this week's dizzying up-and-down action, as the Dow Jones Industrial Average retraced much of its recent decline with help from modest improvement in employment data and a strong quarterly report from Cisco (CSCO).
The last five sessions have made for the largest one-day percentage moves in the history of the Dow.
The blue-chip index finished up 423 points, or 3.9%, at 11,143. The S&P 500 was higher by 51.8 points, or 4.6%, at 1172, and the Nasdaq advanced 111.6 points, or 4.7%, to close at 2492.
"It's like a basketball game," said Paul Nolte, director of investments with Dearborn Partners. "I don't think we will see a v-shaped pattern to the upside but it would be nice if markets could settle into a 4% to 5% trading range instead of moving on a daily basis by that much."Technology stocks were a bright spot after Cisco posted better than expected earnings late Wednesday and broke with its pattern of disappointing guidance, saying it sees year-over-year revenue growth of as much as 4% in the quarter. The stock jumped more than 15% to top the Dow. Financial stocks also showed strong gains with Bank of America (BAC) and JPMorgan Chase (JPM) among the Dow's biggest gainers alongside Exxon Mobil (XOM). Bank of America gained 7% on news that it had held exploratory talks with sovereign investment funds in Kuwait and Qatar to raise capital by selling a $17 billion stake in China Construction Bank. Electronic traded fund Financial Select Sector SPDR (XLF) closed ahead 5.6% at $12.87. "We're tracking the relationships between different sectors," said Nolte. Healthcare, consumer and utilities stocks started to outperform the market in April, but the trend may reverse with energy and materials stocks starting to outperform, he explained. "We normally see an ebb and flow in the course of three to 12 months" between stocks and bonds, and between different sectors, Nolte said. All 30 companies on the Dow traded in positive territory on a day that saw 82% of the 7 billion shares that traded on the New York Stock Exchange rising and only 18% declining. Some 2.9 billion stocks changed hands on the Nasdaq.
Volatile trading following news that an Asian bank had severed credit lines to major French lenders gave way to substantial gains after the Labor Department reported initial jobless claims fell unexpectedly to a four-month low in the first week of August.
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