U.S. Stocks Higher After Robust Economic Data

By Michael Wursthorn and Mike Bird Features Dow Jones Newswires

U.S. stocks rose Thursday, as strong economic data helped lift major indexes.

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The Dow Jones Industrial Average rose 0.2%, or 49 points, to 21941 in recent trading. The S&P 500 gained 0.4%, while the Nasdaq Composite added 0.6%.

Fresh data suggested the U.S. economy has continued to grow at a steady, albeit slow, pace. While geopolitical tensions have weighed on stocks in recent weeks, some investors say the strong data, along with robust corporate earnings, have kept markets on an upward path.

"If the economy is growing and global growth is stable, then that's what we're going to lean on until something tells us something drastically different," said Doron Barness, global head of trading at Oppenheimer & Co.

Americans' personal spending rose in July at the fastest pace since April, while personal incomes posted their biggest one-month jump since February, according to the Commerce Department.

Meanwhile, an official gauge of China's factory activity rose in August, even though new export orders declined.

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The data followed upbeat reports Wednesday showing U.S. gross domestic product growth was stronger than initially thought in the second quarter, while hiring among U.S. private employers increased by more than expected.

Investors are now awaiting Friday's monthly jobs report, which, if positive, should keep U.S. stocks climbing, some investors say, even as many worry about the length of the stock market rally.

"Investors are worried that it's been such a long bull market as we move close to its ninth year," said Jason Draho, head of tactical asset allocation Americas for UBS Wealth Management. "There's more skepticism now among investors."

Shares of energy companies in the S&P 500 rose 0.5% alongside the price of crude oil Thursday. Both energy stocks and oil prices have swung in recent sessions as Tropical Storm Harvey shut down refineries and hit demand for crude.

Marathon Oil, one of the sector's biggest gainers, was up 2.9%, while Newfield Exploration rose 2.4%.

Even after the day's gains, energy shares in the S&P 500 are heading toward monthly losses.

Stocks were also higher across the world, with the Stoxx Europe 600 up about 0.8%.

The euro dipped slightly against the dollar, falling 0.1% to $1.1875, on the back of media reports that European Central Bank officials are concerned about the single currency's surge in the past four months. A stronger euro could damp inflation gains by making imported goods and services cheaper.

"We see the risks as still skewed toward the euro overshooting above $1.20 at some point this year rather than permanently reversing lower," said Deutsche Bank strategist George Saravelos in a note to clients published Thursday.

Earlier, Japan's Nikkei Stock Average closed up 0.7% after weakening in 14 of the past 19 trading sessions, leaving the index down for August. Hong Kong's Hang Seng Index added 0.4%, posting a monthly gain.

Kenan Machado contributed to this article

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Mike Bird at Mike.Bird@wsj.com

Strong economic data helped push stocks higher on Thursday, extending a streak of monthly advances for major indexes.

Gains were broad, with all but two sectors of the S&P 500 ending higher for the day.

Fresh data on personal spending and income on Thursday suggested the U.S. economy has continued to grow at a steady, albeit slow, pace. The reports, alongside generally solid corporate earnings, have helped major indexes continue rising despite swings as tensions flared between the U.S. and North Korea, some analysts said.

"The economic story has been solid and there hasn't been any significant escalation since tensions rose," said Jason Draho, head of tactical asset allocation Americas for UBS Wealth Management. "Investors are relatively calm."

The Dow Jones Industrial Average rose 55.67 points, or 0.2%, to 21948.10 on Thursday, while the S&P 500 added 14.06 points, or 0.6%, to 2471.65. Both indexes posted their fifth consecutive month of gains -- their longest such streak since July 2016.

The Nasdaq Composite added 60.35 points, or 0.9%, to 6428.66, notching its 45th record close of the year.

"If the economy is growing and global growth is stable, then that's what we're going to lean on until something tell us something drastically different," said Doron Barness, global head of trading at Oppenheimer & Co.

Americans' personal spending rose in July at the fastest pace since April, while personal incomes posted their biggest one-month jump since February, according to the Commerce Department.

Meanwhile, an official gauge of China's factory activity rose in August, even though new export orders declined.

The data followed upbeat reports Wednesday showing U.S. gross domestic product growth was stronger than initially thought in the second quarter, while hiring among U.S. private employers increased by more than expected.

Investors are now awaiting Friday's monthly jobs report, which, if positive, should keep U.S. stocks climbing, some investors say, even as many worry about the length of the stock market rally.

"The easy money was made some time ago," said Rob McIver, a portfolio manager of the $6 billion Jensen Quality Growth Fund. "The market does seem to be changing from risk-on to slightly more conservative."

Shares of health-care companies in the S&P 500 gained 1.7% on Thursday in their biggest one-day jump since November. Biotechnology giant Biogen rose $12.81, or 4.2%, to $316.56, while Gilead Sciences added 2.48, or 3.1%, to 83.71.

Meanwhile, energy stocks in the S&P 500 rose 0.5%, nearly erasing their declines for the week. Commodity prices rebounded, too, with U.S. crude for October delivery jumping 2.8% to $47.23 a barrel.

Cabot Oil & Gas added 76 cents, or 3.1%, to $25.55, while Marathon Oil rose 22 cents, or 2.0%, to $11.12, putting them among the biggest gainers in the energy sector for the day.

Energy shares had been under pressure for much of the month, extending losses for the year after Hurricane Harvey crippled Gulf Cost refineries, ports and pipelines and sent crude prices lower.

"It's just so beaten down that you're now getting the reversion trade," said Mr. Barness. "A lot of people have been short energy," he added," so some are also moving to cover their shorts."

Even after the day's gains, the energy sector posted its biggest monthly loss since December 2015.

Stock indexes elsewhere mostly rose. The Stoxx Europe 600 rose 0.8%, while Japan's Nikkei Stock Average closed up 0.7%.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com

(END) Dow Jones Newswires

August 31, 2017 17:58 ET (21:58 GMT)