S&P 500 Eyes Four Days of Green
FOX Business: The Power to Prosper
Encouraged by stronger-than-expected economic data and Mitt Romney's debate performance, Wall Street bid stocks solidly higher Thursday afternoon, leaving the the S&P 500 on track to log a fourth consecutive gain.
Today's Markets
As of 3:14 p.m. ET, the Dow Jones Industrial Average jumped 86.72 points, or 0.64%, to 13580.86, the S&P 500 gained 10.68 points, or 0.73%, to 1461.64 and the Nasdaq Composite added 13.82 points, or 0.44%, to 3149.05. The FOX 50 picked up 7.31 points, or 0.67%, to 1104.09.
In addition to the latest economic data, market sentiment was boosted by another pledge by the European Central Bank to keep the eurozone intact. The Federal Reserve's latest policy minutes had little immediate impact on stock prices.
The gains come after the markets ended Wednesday's seesaw session with modest gains.
The financial sector was the best performing group, soaring 1.5%, perhaps amid hopes a Romney upset after Wednesday's debate could lead to a repeal of the Dodd-Frank financial reform. Individual names like Morgan Stanley (NYSE:MS) and Citigroup (NYSE:C) enjoyed even stronger rallies.
"I think Romney’s strong performance was considered a positive for the markets," said Marc Pado, U.S. market strategist at investment advisory DowBull. “The markets tend to do better under Democrats but they feel better under Republicans.”
Not everyone was sold on the market performance being tied to politics.
“I’m not going to say it’s a Romney rally,” said Dan Greenhaus, chief global strategist at BTIG, pointing to the stronger-than-expected economic data.
Most of the Dow's 30 stocks advanced on Thursday, led by Bank of America (NYSE:BA) and Alcoa (NYSE:AA), which kicks off earnings season next week. The index's weakest links were Intel (NASDAQ:INTC) and Hewlett-Packard (NYSE:HPQ), which plunged on Wednesday on an ugly profit forecast.
However, the Nasdaq Composite saw more modest gains amid declines for tech stocks like AutoDesk (NASDAQ:ADSK) and Applied Materials (NASDAQ:AMAT), which unveiled plans to cut more jobs late Wednesday.
The minutes from the Fed’s September QE3 meeting revealed the central bank could install inflation and unemployment thresholds that would indicate when interest rates will rise. Despite some dissension to QE3, most policymakers determined the lackluster economy needed more Fed stimulus.
Economic Data, Euro in Focus
Stocks hit session highs shortly after the Commerce Department said U.S. factory orders tumbled less than had been feared in August. Orders retreated 5.2%, beating forecasts for a 6% decline but still marking the biggest drop since January 2009. Excluding transportation, orders were up 0.7%.
The markets also responded positively to the latest labor report, which revealed new claims for unemployment benefits rose last week to 367,000 up from an upwardly revised 363,000 the week before. Claims had been expected to jump to 370,000 from a previously reported 359,000.
The weekly report comes a day after ADP said the U.S. created 162,000 private-sector jobs in September, beating forecasts for 143,000 jobs.
But Wall Street is anxiously awaiting Friday's government jobs report, which is forecasted to show the U.S. created 115,000 jobs last month, up from 96,000 in August. The unemployment report is seen rising to 8.2% from 8.1%.
In Europe, the Bank of England and the ECB kept interest rates steady as expected. During a press conference, ECB President Mario Draghi repeated his promise that the euro is "irreversible" and defended his actions, saying the central bank is acting strictly within its mandate.
"Draghi reinforced the idea that the euro is here to stay. We want to hear reassuring comments that their end game is still the same," said Pado.
Meanwhile, the eurozone is exploring boosting struggling Spain by providing insurance for investors who buy government bonds, Reuters reported. The plan is aimed at ensuring Spain isn’t cut off from the bond markets and could cost about 50 billion euros ($64.5 billion) a year.
On the other hand, Bloomberg TV reported the European Union doubts the viability of Spain's 2013 deficit-cut target.
The retail sector ticked higher after U.S. retailers released September results that showed same-store sales rose by an in-line 3.6%, according to Thomson Reuters.
Target (NYSE:TGT) and Macy's (NYSE:M) disclosed sales that missed expectations, while Costco (NASDAQ:COST) beat forecasts.
In the commodities complex, crude oil rebounded solidly from its worst one-day percentage decline since the end of 2011. After diving 4.08% on Wednesday due to jitters about China's economy, crude surged $3.57 a barrel, or 4.05%, to $91.71. Gold jumped $16.80 a troy ounce, or 0.95%, to $1,794.10.
Corporate Movers
Sprint Nextel (NYSE:S) is exploring a counterbid for No. 5 player MetroPCS (NYSE:PCS) that would trump T-Mobile USA’s offer earlier this week, Bloomberg reported. One obstacle could be hefty breakup fees that T-Mobile and MetroPCS would owe if either backs out of the tie-up.
Facebook (NASDAQ:FB) revealed it hit the one billion monthly active user mark in September. The milestone comes just over two years after the social network celebrated 500 million users.
Google (NASDAQ:GOOG) said it may slash more than the previously-announced 4,000 jobs at its Motorola Mobility business and raises the price tag on restructuring and severance charges for the third quarter to $340 million.
Global Markets
The Euro Stoxx 50 slipped 0.27% to 2485.75, London’s FTSE 100 gained 0.03% to 5827.78 and the German DAX lost 0.23% to 7305.21.
In Asia, Japan’s Nikkei 225 jumped 0.89% to 8824.59 and Hong Kong's Hang Seng advanced 0.09% to 20907.95.