Stocks rose Thursday but traded off their highs as relief over a patient Federal Reserve fueled market gains.
The S&P 500 was up 0.5%, the Dow Jones Industrial Average jumped 0.6%, and the Nasdaq rose 0.6%, hitting a new intraday high. Stocks have risen for the past three days.
On Wednesday, the Nasdaq posted a new record close and the S&P 500 and Dow rallied after the Fed opted not to raise interest rates for another month. Fed Chair Janet Yellen reiterated a cautious approach to future rate increases, even though she argued that the case for an interest rate hike had strengthened.
The majority of investors are now pricing in the likelihood of a December rate hike. Chances are now at 52%, according to CME Group fed funds futures, up from 48% before the announcement on Wednesday.
"The Fed appears to be positioning for a hike in December, and at this stage we see that outcome as more likely than not," BNP Paribas analysts wrote in a note. "Saying it is waiting for more evidence in the time being, despite the case for a rate hike having strengthened, suggests that barring significant events the rate hike will not be long in coming."
U.S. jobless claims fell to their lowest level since July in the past week, according to the Labor Department. The number of new claims for unemployment benefits fell by 8,000 to 252,000. Analysts expected the number to tick up to 261,000.
Existing home sales fell 0.9% in August to a 5.33 million annual rate, the he National Association of Realtors said. Its the second straight monthly decline. Economists forecast a 5.44 million rate.
Crude oil prices moved higher again on Thursday as a steep decline in weekly inventories released a day earlier continued to feed confidence in a slow recovery in commodities. U.S. oversupply, weaker global demand and breakneck output from some of the world's largest oil producers have beaten down oil prices over the past two years.
West Texas Intermediate crude was up 2.4% to $46.42 a barrel on Thursday.
Jabil Circuit (JBL - Get Report) fell 5.1% despite it besting quarterly estimates for profit and sales. The circuit maker earned 28 cents a share, 3 cents above estimates, while revenue of $4.4 billion exceeded consensus of $4.27 billion. Fiscal first-quarter profit also met estimates.
Red Hat (RHT) increased 4.8% after boosting guidance in the wake of a better-than-expected quarter. The developer of open-source platform Linux expects per-share earnings between $2.23 and $2.25 a share for the full year, up from a previous range of $2.19 to $2.23 a share. Chief Financial Officer Frank Calderoi credited the company's recent quarterly performance with a "record number of deals over $1 million" and overall solid demand.
Bed Bath & Beyond (BBBY - Get Report) rose 3.1% despite the company missing estimates on its top- and bottom-lines. Second-quarter earnings of $1.11 a share fell short of consensus by 6 cents, while revenue of $2.99 billion was shy of forecasts by $60 million. Comparable-store sales fell 1.2%, an unexpected drop, as the retail environment remained competitive.
Rite Aid (RAD - Get Report) rose 0.4% after a mixed quarter. The pharmacy chain earned an adjusted 3 cents a share, a penny above consensus. Sales increased nearly 5% to $8 billion, though fell short by $200 million. Same-store sales growth of 2.5% came in higher than an estimated 1.9%. Rite Aid's acquisition by Walgreens Boots Alliance (WBA - Get Report) is expected in the second half.
Sarepta Therapeutics (SRPT - Get Report) rose 2.5% after announcing plans to offer $225 million in common stock. The drugmaker said proceeds will be used to bakroll further clinical trials and research and development.
B&G Foods (BGS - Get Report) agreed to acquire the spices and seasonings unit of ACH Food Cos. in a deal worth $365 million. B&G expects the deal to close in the fourth quarter and add annual adjusted earnings of 26 cents to 28 cents a share to its bottom line.
Lennar (LEN - Get Report) gained 1.8% after agreeing to purchase WCI Communities (WCIC) in a deal worth $643 million. Lennar offered $23.50 in cash and stock for every WCI share, an offer that values WCI at a 37% premium to its Wednesday close. WCI shareholders will vote on the acquisition offer at the end of the year. WCI jumped 39.5%.
Mylan (MYL - Get Report) rose 2.3% Thursday after CEO Heather Bresch testified before a congressional panel on Wednesday, justifying the price hikes of the drugmaker's life-saving EpiPens. The list price of EpiPens has grown to $608 for a two-pack, an increase of more than 500% since 2007.
AutoZone (AZO) rose slightly after the auto parts retailer beat profit expectations.