Updated from 4:14 p.m. EDT
Signs of brisk consumer spending drove a rally in tech stocks Thursday and helped vanquish memories of the week's previously formidable losses.
surged 40.99 points, or 1.88%, to 2219.86, paced by 4% gains in
and a 9.7% surge in
. The index finished about 10 points above its level prior to Tuesday's 2.1% hammering.
rose 15.62 points, or 1.23%, to 1285.71, finishing 6 points above last Friday's close. The
Dow Jones Industrial Average
gained 91.97 points, or 0.82%, to 11,260.28.
"The market has been in an oversold condition, which gave us today's rally," said Peter Boockvar, equity strategist with Miller Tabak. "However, all today did was get us back where we were to begin the week. The Dow is actually still down for the week so far."
The Dow was aided by gains of 2.2% or more in components
About 1.69 billion shares changed hands on the
New York Stock Exchange
, with advancers outpacing decliners by a 3-to-1 margin. Volume on the Nasdaq was 2.13 billion shares, with advancers beating decliners 3 to 1.
The 10-year Treasury bond yield fell to 5.11% from 5.13% before the data. The dollar eased against the yen and euro.
Thursday's surge kicked off before the bell when the Labor Department revised first-quarter productivity to 3.7% from 3.2% and said unit labor costs -- a key measure of inflationary pressures -- were somewhat lower in the quarter than previously believed.
Later, a report on purchasing activity among manufacturers showed weaker-than-expected expansion. The Institute for Supply Management manufacturing index for May fell to 54.4 from 57.3 in April. Economists expected the ISM index to decline slightly to 55.7. Separately, a Commerce Department report on construction spending was in line with forecasts.
To view Gregg Greenberg's video take on today's market, click here
Oil eased as traders marked the first day of hurricane season in the U.S. July crude, which lost more than 1% Wednesday as the U.S. set terms for nuclear talks with Iran, fell another 95 cents to close at $70.34 a barrel Thursday, reversing early losses. A report from the Energy Department showed U.S. crude and gasoline inventories rose last week.
Thursday brought a deluge of chain-store sales numbers for May.
continued to be a drag, previewing a lackluster June after reporting a paltry 2.3% same-store sales gain for last month. Wal-Mart lost 6 cents, or 0.1%, to close at $48.39.
The impact was soothed, however, by solid results from several department stores.
posted a better-than-expected 11.1% rise in same-store sales, while
also posted strong comps.
reported its fourth straight monthly decline in same-store sales. Comps fell 6.6% from a year ago, and the company reiterated guidance for a wide loss in the first quarter. However, Pier 1 finished the session up 46 cents, or 5.4%, to $8.95.
Away from retail,
said second-quarter earnings fell slightly from last year to $101 million, or $1.55 a share. The results beat estimates, and the company reiterated its full-year profit guidance. Hovnanian rose $1.44, or 4.5%, to $33.27.
earned $3.34 million, or a penny a share, in its fiscal third quarter. Adjusted earnings of 3 cents a share matched estimates. The software outfit issued fourth-quarter guidance that was a penny light. Novell dropped $1.13, or 14.6%, to $6.60.
said late Wednesday that it will cut up to 5,000 workers in an effort to spur profitability. The server maker expects the layoffs and other initiatives to result in up to $590 million in annual savings. Sun gave up 8 cents, or 1.7%, to $4.55.
Auto and truck sales reports for May also were released on Thursday.
said vehicle sales were down 1.9% for the month to 278,546.
said U.S. sales fell 12.2% to 345,157. Meanwhile,
said sales were up 17% to 235,708 in May.
In ratings moves, CIBC World Markets upgraded
to sector outperformer from sector performer, saying it expects strong earnings growth. The stock gained 85 cents, or 3.3%, to $26.91.
Overseas markets were mostly higher Thursday, with London's FTSE 100 up 0.5% to 5750 and Germany's Xetra DAX higher by 0.3% to 5707. In Asia, Japan's Nikkei rose 0.2% overnight to 15,503, and Hong Kong's Hang Seng tumbled 1.3% to 15,645.
Traders continued to digest the latest
minutes, which depicted a marginal uptick in hawkish sentiment at last month's FOMC meeting. Financial futures showed that Wednesday's release upped the chances of another quarter-point rate hike when the Fed next meets on June 28-29.
"A number of factors were augmenting the upside risks to inflation: the surge in energy and commodity prices, some recent weakness in the foreign exchange value of the dollar, and the possibility that the apparent increase in inflation expectations could, if it persisted, impart momentum to inflation," the May 10 minutes read.
On Friday, the government releases its employment report for May. Economists are currently looking for a payroll gain of 170,000 jobs, and for the unemployment rate to hold at 4.7%.
"The bulls want the jobs number to be a good one without being too hot or too cold," Boockvar added. "Anything higher than expected will fan the Fed fears, while anything much weaker will bring up fears of an economic slowdown."
The policymakers' concern didn't keep buyers away from stocks on the last day of May. For Wednesday, the Dow gained 74 points, or 0.7%, to 11,168, and the S&P 500 added 10 points, or 0.8%, to 1270. The Nasdaq gained 14 points, or 0.7%, to 2179.
"The market rallied strong at the end of the day despite the FOMC minutes mentioning the possibility of a 50-basis-point increase," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "While that does not seem likely, it did move up the yield on the two-year Treasury bond to over 5% for the first time in this bull market run on short-term yields. That should increase the likelihood of another rate hike, but we still have an entire month of economic data to wade through before the next FOMC meeting."
Still, May turned out badly for bulls, with the Dow's 1.7% decline making it the worst month since last June. The S&P 500 shed 3.1% on the month while the Nasdaq lost 6.2%; both were the worst monthly percentage declines for the indices since 2004.