Stocks Jump as Market Awaits Payroll Report
Stocks strode higher in a late-session buying surge Thursday as oil prices stepped back from their highs and investors shrugged off mixed economic data, focusing with renewed optimism on job data to be released early today.
The Dow Jones industrial average jumped more than 120 points, and the Standard & Poor’s 500 index erased its loss for the year.
Trading has been muted all week because of the Republican convention in New York and the coming Labor Day holiday. Investors were also looking ahead to an after-the-bell outlook from chip maker Intel -- which came in gloomy -- as well as the U.S. employment data.
Some traders attributed Wall Street’s run-up to speculation that the job report would be better than expected.
Most economists were expecting a net gain of 100,000 to 200,000 jobs in August.
The Dow rallied 121.82 points, or 1.2%, to 10,290.28, its highest closing level in seven weeks.
The broader gauges also rose sharply. The Nasdaq composite index climbed 23.02 points, or 1.2%, to 1,873.43.
The Standard & Poor’s 500 index gained 12.40 points, or 1.1%, to 1,118.31. The sprint sent the S&P; 500 back into positive territory for the year, up 0.6% since the start of 2004.
Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange.
In economic news, the Commerce Department said orders to U.S. factories grew 1.3% in July after a 1.2% advance in June. The increase was led by a big jump in demand for commercial aircraft and parts.
August sales reports issued Thursday by major retailers were less upbeat. Many firms reported sluggish results.
The government also said the number of people signing up for unemployment benefits rose for a second week, reflecting the effect of Hurricane Charley.
Crude prices closed slightly higher after Russia’s largest oil producer, Yukos, warned of a possible production halt after a Moscow court’s ruling to freeze its assets as part of a battle over back taxes. Oil futures ended at $44.06 a barrel, up 6 cents, in New York, after rising as high as $45.37.
The fact that the stock market was up in spite of so many negative factors was cause for optimism, analysts said, and perhaps a sign that investors were setting aside some of the worries that kept them on the sidelines during the summer.
“The Olympics? No terrorism. Democratic convention? No terrorism. And now we’re getting this other one [the GOP convention] out of the way,” said Bill Groenveld, head trader for VFinance Investments.
In other market highlights:
* Treasury bond yields shot up on expectations of a strong job report. The yield on the 10-year T-note rose to 4.21% from 4.12% on Wednesday.
* Most retail stocks rallied as optimism about the employment report might have overcome concern about August sales. Home Depot rose $1.05 to $37.93, Sears gained $1.88 to $39.99 and Ross Stores jumped $2.11 to $23.53.
* Intel inched up 20 cents to $21.63 but sank below $20 in after-hours trading after it reduced its forecast for third-quarter revenue. Other chip stocks also fell in after-hours trading.
* Internet search engine Google gained $1.26 to $101.51 in heavy trading as employees and other insiders became eligible to sell shares after last month’s initial public offering. The stock traded as low as $98.94 before recovering.
* Manufactured-housing stocks rose on expectations that orders from Florida could increase in the aftermath of Hurricane Frances. Fleetwood Enterprises jumped 73 cents to $13.51 and Palm Harbor Homes was up 72 cents to $17.13.
* Steel stocks advanced after the government said steel imports declined in July. Nucor gained $2.39 to $80.79, U.S. Steel rose $1.66 to $38.25 and Reliance Steel surged $1.29 to $39.28.
* In foreign trading, the Australian All Ordinaries share index rose 0.3% to a record high of 3,594.70. The index is up 8.7% this year in Australian dollar terms. Strong profit growth at natural resources companies has helped bolster the market.
