U.S. Stocks Roll for Third Day as Economic Data Strengthen
NEW YORK ( TheStreet) -- U.S. stocks rallied for a third straight day as U.S. jobless claims fell and Federal Reserve Governor Jerome Powell said the economy was showing signs of finally turning-around.
The S&P 500 gained 0.62% to close at 1,613.20. The gauge has risen 2.6% since Monday though it remains poised to decline 1% for June, which would make it the S&P's first monthly decline since October.
Powell, a member of the Fed's all-important policy-setting panel, the Federal Open Market Committee, told an audience at the Bipartisan Policy Center in Washington that "the first reduction in purchases, when it comes, will be an acknowledgement of the economy's progress and a sign of the Committee's confidence in the path to full recovery."
Indeed, data released earlier today showed consumer spending had increased while pending home sales surged as buyers rushed to take advantage of favorable financing conditions before they tightened."You have had this 'Federal Open-Mouth Committee' driving markets, but the attempt I think has been to calm markets by explaining what they are all trying to say but it has probably caused as much confusion as anything else," Liz Ann Sonders, chief investment strategist for Charles Schwab, said in an interview. The Dow Jones Industrial Average added 0.8% to close at 15,024.49 while the Nasdaq also advanced 0.8% to finish regular trading at 3,401.86. Time Warner (STX) the top percentage gainer on the S&P, up 4.4% to $108.22. A media report, citing people familiar with discussions, said Liberty Media Chairman John Malone is looking into opportunities for Charter Communications (CHTR) to acquire the cable company. ConAgra Foods (CAG) was another winner, up 5.1% to $35.04 after the food producer booked fiscal fourth quarter earnings of 60 cents a share, beating estimates by a penny, as the company continues to reap earnings contributions from its Ralcorp acquisition. Paychex (PAYX) was the biggest loser, down 3.7% to $36.60 after the payroll services company gave a disappointing growth outlook after posting fiscal fourth quarter revenue that missed expectations. During the quarter, the company's net income barely changed from a year earlier amid higher costs and taxes. DirecTV (DTV) was also down, off 0.57% to $60.73 after the satellite TV giant revealed that internal investigations showed that its Latin American segment had exaggerated subscription numbers for 2012 and the quarter ended March 31 amid the use of unauthorized subscriber retention and churn management practices. Among the discoveries based on preliminary results of the investigation was that the number of Sky Brasil subscribers at December 31, 2012 should have been approximately 100,000 lower than the amount reported. The Department of Labor Thursday reported that initial jobless claims in the week ended June 22 decreased 9,000 to 346,000. Economists on average were expecting jobless claims of 345,000. The four-week moving average was 345,750, a decline of 2,750. "The latest reading brings claims back below the 350,000 line-in-the-sand beneath which the economy should translate into payroll gains," Andrew Wilkinson, New York-based chief economist strategist at Miller Tabak said in a note. Continuing claims in the week ended June 15 fell 1,000 to 2.965 million, according the Department of Labor. Economists were expecting continuing claims of 2.95 million. The Bureau of Economic Analysis said that personal income increased by a greater-than-expected $69.4 billion, or 0.5% in May. A 0.2% gain in personal income was expected. Personal spending rose $29 billion, or 0.3%, in line with estimates. The National Association of Realtors said Thursday that its Pending Home Sales Index, a forward-looking indicator based on contract signings, increased by a much greater than expected 6.7% to 112.3 in May, its highest level since late 2006 as buyers appeared to want to take advantage of favorable financing conditions before mortgage interest rates move higher, according to Lawrence Yun, the chief economist at the Chicago-based NAR. A May rise of 1% was expected. "This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand," Yun said in a statement. China's National Bureau of Statistics said Thursday that China's industrial firms made total profit of 2.08 trillion yuan ($338.4 billion) in the first five months of this year, up 12.3% from the same time last year. For May alone, a year-over-year gain of 15.5% was registered, according to the NBS. The benchmark 10-year Treasury was rising 16/32, lowering the yield to 2.48%. August gold futures dropped $18.20 to $1,211.60 an ounce. August crude oil futures popped $1.55 to $97.05 a barrel. Follow @atwtse Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.>
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