Market Wrap for Thursday, June 13: Strong Economic Reports Trigger Stock Rally

Despite continued volatility around the world, particularly in Japan where the Nikkei fell more than 6 percent, the U.S. market rallied sharply on Thursday on the back of strong economic data. In particular, investors reacted to a strong retail sales report, sending the Dow up more than 180 points on the day. The move comes after three consecutive days of losses for the market and rising jitters on Wall Street. The strong bounce back will be welcomed by investors and suggests the rally in equity prices is not over.

Major Averages

The Dow Jones Industrial Average rose 181 points, or 1.21 percent, to 15,176.

The S&P 500 climbed 24 points, or 1.48 percent, to 1,636.

The Nasdaq added 45 points, or 1.32 percent, to close at 3,445.

Jobless Claims

Initial jobless claims fell from 346,000 for the week ending June 1 to 334,000 for the week ending June 8. This compared to consensus estimates calling for the initial claims level to fall to 345,000.

Continuing claims rose to 2.973 million for the week ending June 1 compared to 2.971 million for the week ending May 25. Continuing claims were in line with consensus estimates.

Retail Sales

Retail sales surged 0.6 percent for the month of May compared to a 0.1 percent increase in April. This compared to consensus estimates calling for a rise of 0.3 percent.

Excluding auto sales, retail sales were up 0.3 percent in May versus no change in April. This was in line with consensus expectations.

Business Inventories

Business inventories rose 0.3 percent in April after falling 0.1 percent in March. This compared to consensus estimates calling for a rise of 0.2 percent.

Commodities

Crude oil prices rose along with the stock market on Thursday. At last check, NYMEX crude futures were up 0.67 percent to $96.52 while Brent crude contracts had added 0.73 percent to $104.25. Natural gas futures were last trading higher by around 1 percent to $3.82.

Precious metals fell as stocks rose on the session. Near the close of equities, COMEX gold futures were down around 1 percent to $1,377.90. Silver futures were off by a little less than 1 percent to $21.60. Copper lost 0.82 percent on the day to $3.1990.

In the grains complex, corn and wheat futures were mixed. At last check, corn was trading down 0.42 percent while wheat had climbed 0.37 percent. Movers in soft commodities included cocoa and orange juice. Cocoa contracts fell almost 3 percent on the day while orange juice was trading down around 2 percent.

Bonds

Bonds rose sharply on Thursday after falling on Wednesday. Heading into the closing bell, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) was up 1.35 percent to $113.87. Yields fell as prices rose on the session.

The yield on the 2-Year Note was sitting at 0.30 percent while the 5-Year yield was 1.09 percent. The yield on the 10-Year Note and 30-Year Bond was 2.18 percent and 3.33 percent, respectively.

Currencies

The U.S. Dollar fell on Thursday, helping to spark a rally in risk assets. At last check, the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.46 percent to $21.87.

The closely watched EUR/USD pair was last up 0.12 percent to $1.3345. Other movers included the USD/JPY, which fell 0.86 percent, and the AUD/USD, which was up 1.23 percent.

Volatility and Volume

The CBOE Volatility Index fell sharply amid the snap-back rally in stock prices on Thursday. Late in the day, the VIX was down around 11.50 percent to 16.45.

Volume was only slightly above average despite the bullish market activity. Around 138 million SPDR S&P 500 ETF (NYSE:SPY) shares traded hands on the session compared to a 3-month daily average of 133 million.

Stock Movers

Shares of Gannett (NYSE:GCI) shares were up almost 34 percent near the closing bell on Thursday after the company agreed to acquire television broadcaster Belo (NYSE:BLC) for around $1.5 billion or $13.75 per share.

Belo shares jumped almost 28 percent on the news and were last trading $0.05 below the deal price.

Empire Co., the parent of Canada's second-larges grocery store chain, agreed to buy Safeway's Canadian operations for $5.68 billion. The news sent Safeway shares up almost 8 percent on the day.

Shares of PVH (NYSE:PVH) jumped better than 10 percent in the wake of the company's fiscal first-quarter earnings results.

Spreadtrum Communications (NASDAQ:SPRD) rose better than 10 percent on Thursday after the company raised its second-quarter revenue guidance.

Verastem (NASDAQ:VSTM) jumped more than 13 percent after the company was granted orphan status by European regulators for its experimental mesothelioma treatment.

Shares of Myriad Genetics (NASDAQ:MYGN) initially traded sharply higher on a Supreme Court ruling related to gene patents, but fell in late trade. The market appeared to be initially confused by the ruling, which threw out patents held by the company. At last check, the stock was down around 5 percent. It was a partial win for Myriad, however, as the Court ruled that synthetically produced genetic material, known as cDNA, can be patented.

Shares of Barnes & Noble (NYSE:BKS) lost almost 9 percent on the day. The company is reportedly abandoning its Nook apps for PC and Mac in favor of Web-based reading on the computer.

Sigma Designs (NASDAQ:SIGM) fell almost 6 percent after reporting a loss for its fiscal first-quarter.