Palo Alto Networks, Box, HPE move on earnings
U.S. stocks traded in record territory on Thursday following a positive read on private-sector employment. The trading action comes ahead of Friday's closely watched jobs report, which will be read for signs of confirmation of continued health in the U.S. jobs market.
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The S&P 500 index gained 11 points, or 0.5%, to 2,423, trading near its intraday record of 2,423.85. The Dow Jones Industrial Average rose 76 points, or 0.4%, at 21,083, near its highs of the session. Meanwhile, the Nasdaq Composite Index climbed 32 points, or 0.5%, to 6,231, hovering around its intraday all-time high of 6,233.15.
"I can't predict the future but this is not a bad environment we are in. The Fed is going to raise rates but they are going to do it in a way to encourage growth. Earnings expectations are rising and the economy is rising," said John Manley, chief equity strategist at Wells Fargo Funds.
All three indexes posted monthly gains in May and are notably higher for 2017, with the Nasdaq up more than 15% year-to-date. The move has raised some concerns about valuation.
"Fundamentals look good, but valuations look rich, and rich valuations need better than good fundamentals, they need very good fundamentals," said Stephen Wood, chief market strategist at Russell Investments.
The latest read on private-sector employment surged past expectations in May (http://www.marketwatch.com/story/private-sector-job-growth-rebounds-to-rip-roaring-pace-in-may-adp-says-2017-06-01), coming in well above forecasts. However, weekly jobless claims rose more than expected in the latest week (http://www.marketwatch.com/story/jobless-claims-climb-to-5-week-high-of-248000-2017-06-01), hitting a five-week high. The releases painted a mixed picture about what could be expected in Friday's nonfarm-payrolls report.
Read:May hiring gains to reflect warming but not sizzling economy (http://www.marketwatch.com/story/the-economy-seems-frozen-in-time-but-underneath-the-ice-the-water-is-warming-2017-05-28)
"The ADP number came in strong, much stronger than consensus, but there's still some softness in the data that we're seeing overall," Wood said.
In other data released on Thursday, construction spending sagged in April (http://www.marketwatch.com/story/construction-spending-eases-in-april-after-robust-start-to-the-year-2017-06-01) as a strong start to the year started to falter. However, the Institute for Supply Management said its manufacturing index edged up a 10th of a point (http://www.marketwatch.com/story/us-manufacturing-kept-strength-in-may-ism-survey-finds-2017-06-01) to 54.9%, about even with expectations.
Individual movers: Shares in Palo Alto Networks Inc.(PANW) jumped 15% a day after the computer security company late Wednesday posted better-than-expected quarterly results (http://www.marketwatch.com/story/palo-alto-networks-surge-10-on-earnings-beat-outlook-2017-05-31). Cloud-based storage company Box Inc.(BOX) popped 8.2%, briefly hitting a 52-week high intraday, after its own earnings report (http://www.marketwatch.com/story/box-beats-and-raises-guidance-stock-jumps-6-2017-05-31).
See:Free cash flow is great, and AI is next, says Box CEO (http://www.marketwatch.com/story/box-ceo-aaron-levie-free-cash-flow-is-great-artificial-intelligence-is-next-2017-05-31)
Hewlett Packard Enterprise Co.(HPE) lost 6.6% after the provider of computer servers late Wednesday reported weaker-than-expected earnings (http://www.marketwatch.com/story/hewlett-packard-enterprise-shares-slide-on-weaker-than-expected-earnings-2017-05-31).
Check out:Why HPE investors are wondering if they bet on the wrong horse in split (http://www.marketwatch.com/story/hpe-investors-wondering-if-they-bet-on-the-wrong-horse-in-split-2017-05-31)
Ollie's Bargain Outlet Holdings Inc.'s (OLLI) rose 2.5% after reporting results that beat expectations (http://www.marketwatch.com/story/ollies-bargain-beats-fiscal-q1-sales-earnings-expectations-2017-05-31).
Cable giant Charter Communications Inc.(CHTR) shares were mostly flat following news that it rejected a $100 billion buyout offer from Verizon (http://www.marketwatch.com/story/cable-giant-charter-rejected-a-100-billion-buyout-bid-from-verizon-sources-say-2017-06-01). Verizon Communications Inc.(VZ) fell 0.3%.
On the monetary-policy front, Federal Reserve Gov. Jerome Powell said it would be appropriate (http://www.marketwatch.com/story/feds-powell-balance-sheet-may-eventually-be-halved-from-current-levels-2017-06-01) for the U.S. central bank to gradually raise interest rates if the economy performs as expected. He added that might also be appropriate if the Fed begins reducing the size of its balance sheet this year.
President Donald Trump has said he would announce his decision (http://www.marketwatch.com/story/trump-likely-to-pull-out-of-paris-climate-deal-2017-06-01) on whether the U.S. will keep its commitments to a Paris climate accord at 3 p.m. Eastern.
See:Trump likely to pull out of Paris climate deal (http://www.marketwatch.com/story/trump-likely-to-pull-out-of-paris-climate-deal-2017-06-01)
Other markets: Oil futures gained after a report from the U.S. Energy Information Administration showed that domestic crude supplies fell by 6.4 million barrels for the week ended May 26, marking an eighth weekly drop in a row.
European stocks rose, while Asia markets closed mixed. Gold futures lost ground, and a key dollar index was slightly higher.
--Victor Reklaitis contributed to this article.
(END) Dow Jones Newswires
June 01, 2017 13:02 ET (17:02 GMT)