New York Stock Exchange
(BLOOMBERG) U.S. stocks rose a fifth day, giving the Standard & Poor’s 500 Index its longest rally since March, as data showing an unexpected decline in jobless claims last week tempered concern about a worsening of Europe’s economy.
E*Trade Financial Corp. rallied 6.7 percent as Chief Executive Officer Steven J. Freiberg was ousted from the company and its board is seeking a new leader. Cisco Systems Inc. advanced 2.3 percent after the biggest maker of computer- networking equipment was added to the “Conviction Buy” list at Goldman Sachs Group Inc. Monster Beverage Corp. declined 8.6 percent after profit and sales missed analysts’ projections.
About three stocks rose for every two falling on U.S. exchanges. The S&P 500 gained 0.2 percent to 1,404.84, after rallying 2.7 percent in four days. The Dow Jones Industrial Average added 13.81 points, or 0.1 percent, to 13,189.45 Thursday. Trading in S&P 500 companies was down 6.9 percent from the 30-day average at this time of day.
“We acknowledge the positive news,” Wayne Lin, a money manager at Baltimore-based Legg Mason Inc., said in a phone interview. His firm oversees $631.8 billion. “We’ve had some positive surprises on the jobs front and it seems that housing has found some footing. Yet people are aware of the risks. The risk in Europe is still out there.”
Labor Department figures showed that jobless claims unexpectedly dropped to 361,000 in the week ended Aug. 4. Economists predicted an increase to 370,000. Prices for single- family homes climbed in most U.S. cities in the second quarter and values nationally jumped the most since 2006 as real estate markets stabilized.
The euro weakened for a third day against the dollar after economists surveyed by the European Central Bank predicted the region’s contraction this year will be worse than previously forecast.
“It’s kind of blah,” said Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. “The jobless claims report was better-than-estimated, but it’s just one data point. We need to see other reports to get the market moving dramatically higher. In addition, growth is slowing in other parts of the world. It will take time.”
A four-day rally has taken the S&P 500 up almost 10 percent from a five-month low on June 1. The index is trading above the average year-end forecast among Wall Street strategists of 1,389. About 72 percent of S&P 500 companies which reported second-quarter results so far have beaten analysts’ earnings estimates, according to data compiled by Bloomberg.