Market Wrap-Up
Stocks and many exchange-traded funds got a midday boost Thursday and rode it to the market’s close, building on strong retail sales figures and an unexpected rise in weekly jobless claims data.
The Dow Jones Industrial Average overcame an early dip to finish on the upside, gaining 30 points to close at 10927. The S&P 500 rose 4 points to 1186 and the Nasdaq picked up 6 points at 2437.
The Labor Department said initial claims for jobless benefits rose unexpectedly last week, jumping 18,000 to a seasonally-adjusted 460,000. (Economists generally say claims must fall to around 400,000 in order to be consistent with a stable labor market.)
In a positive measure, U.S. retailers reported strong year-over-year gains in March sales at stores opened more than a year, as indications continue to grow that consumers are spending again. The S&P Retail index hit a 52-week high.
Kohl’s (KSS) raised its first-quarter earnings guidance after reporting double-digit-percent sales growth for March. The discount retailer attributed the change to increasing traffic as consumers continue to seek bargains. J.C. Penney (JCP) also increased its first-quarter sales and earnings forecasts as the retailer said its same-store sales rose in March.
Both European stocks and the euro tracked lower, as the markets’ attention focused firmly on Greece and its debt problems, which pushed up the country’s borrowing costs to new record levels. Strategists at Deutsche Bank said they believe international support for Greek debt will continue to wane until there are explicit details of a support package.
“The market is in the mood to force the hand of the authorities over this,” Deutsche Bank said. “Greek banks this week asking for assistance from their government is ironic as they were the main buyer of last week’s seven-year deal. So once the major and largest marginal buyer of stressed Greek government debt [are] required help themselves then one can see how the funding problem can become a vicious circle,” it added.
In currency markets, the dollar was at 93.02 yen, from 93.30 yen late Wednesday in New York. The euro was at $1.3322, from $1.3354, and the pound was at $1.5204, from $1.5247.
The airline industry could be strengthened if a proposed merger between United Airlines’ corporate parent UAL (UAUA) and US Airways Group (LCC) goes through. Reports said talks had resumed and that a proposed merger would likely be done through a stock swap.
Crude oil futures dropped 37 cents to $85.51 a barrel. Gold futures closed nearly flat.
For a detailed rundown on Thursday’s trading session see our market story.
Winners
The SPDR S&P Homebuilders fund (XHB) picked up 2.1% after a class action lawsuit against PulteGroup (PHM) subsidiary Centex (CTX) was dismissed. Strong sales reports pushed the Retail HOLDRS Trust fund (RTH) up 1.4%.
Losers
Another day of declines on the spot market pushed down shares of the United States Natural Gas fund (UNG) by 2.2%. The Semiconductor HOLDRS Trust fund (SMH) dropped 1.5%, as investors pulled back from chip makers following heavy buying earlier in the week.
Thursday’s Industry Headlines
Data Point
State Street (STT) reported that assets in the U.S. ETF industry totaled $806 billion as of March 31, an increase of $54.2 billion, or 7.2% during the month. Assets in large cap ETFs climbed $12.9 billion during the month – led by the SPDR S&P 500 fund (SPY), which attracted almost $3.5 billion in net inflows in March. Demand for dividend income remained high, as the SPDR S&P Dividend Fund (SDY) attracted more than $280 million in net new inflows during the month and is up $430 million year to date. There are now 863 exchange-traded funds, run by 31 managers.
Launching Pad
Fund provider ProShares announced Thursday the launch of two ETFs with leveraged and inverse exposure to the biotechnology sector. The funds seek to provide 200% or negative 200% of the return of the NASDAQ Biotechnology Index for a single day. The new funds, the Ultra Nasdaq Biotechnology fund, and the UltraShort Nasdaq Biotechnology fund, began trading on the New York Stock Exchange.
Friday’s Notebook
Earnings and Conference Calls
Blyth, Constellation Brands, Shaw Communications
Economic Data
10:00 a.m. Wholesale Trade
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