Trade Data Enliven the Bulls: Stocks Climb

FOX Business: The Power to Prosper

The blue chips finally managed to snap the longest losing streak in nearly a year, charging into the green on better-than-expected trade deficit data.

Today's Markets

The Dow Jones Industrial Average gained 75.42 points, or 0.63%, to 12,124, the S&P 500 was up 9.4 points, or 0.74%, to 1,289 and the Nasdaq Composite climbed 9.5 points, or 0.35%, to 2,685. The FOX 50 was higher by 5.6 points to 903.

Concerns over the strength of the once robust economic recovery had been a major factor in sparking the nearly 5% selloff for the major market averages over the last six days.  However, the rare glimmer of light that came amid a week light on economic reports ignited Thursday's rally. The bulls lost momentum late in the trading session, however, pulling stocks well off session highs.

Exports hit a new record high of $175.6 billion, while imports fell to $219.2 billion, the Commerce Department reported. The trade deficit, which measures the difference between the two, unexpectedly fell to $43.8 billion in April from $46.8 billion the prior month.  Wall Street predicted the number would rise slightly to $48.8 billion.

While the report is a lagging indicator, the balance of trade has a significant impact on the American economy, and is a direct component in calculating broader economic expansion.

Still, the economic picture remains cloudy. The Labor Department reported that 427,000 people filed for unemployment benefits last week, up from a revised 426,000.  Economists had forecast the number of claims to have fallen to 415,000 for the week.

"Today's claims report is a further indication of a loss in momentum in labor markets, wrote Michael Gapen, an economist with Barclays Capital, in a research note.

Claims under the 400,000-level are generally seen as pointing to modest labor market recovery.  In recent weeks, the data have been muddied by temporary factors, such as the lingering impact the earthquake that hit Japan in March is having on U.S. automakers.

Also on the economic front, wholesale inventories edged 0.8% higher in April as businesses have felt more confident about the state of the economy, slightly shy of estimates of a 1% gain.

The European Central Bank's monetary policy statement impacted stocks on the day as well.  The ECB held short-term interest rates at 1.25% as expected. However, traders were focusing on ECB President Jean-Claude Trichet's use of the phrase "strong vigilance" regarding European inflation, which many analysts say point to a rate hike in July.

Generally, higher euro zone interest rates, as compared with American short-term rates, would be bullish for the euro.  However, the euro actually pared gains in morning trading.

"The message is clear today, [currency] traders are worried that the European economy and particularly Greece, Ireland, Portugal and maybe Spain, can't handle higher interest rates," wrote Peter Boockvar, managing director at Miller Tabak + Co., in a research note.

The euro fell 0.4% against the U.S. dollar, and the greenback gained 0.37% against a basket of world currencies.

Oil rallied Wednesday and into Thursday after the Organization of Petroleum Exporting Countries failed to agree on a production increase.  Many analysts, however, note that it is possible that cartel members increase production despite a formal agreement, something traders will be watching closely.

Light, sweet crude gained $1.19, or 1.2%, to $101.93 a barrel.  Wholesale RBOB gasoline -- which performed the best in nearly a month --  soared 6 cents, or 2.1%,  to $3.04 a gallon.

Consumer gasoline prices have moderated slightly this week.  A gallon of gas at the pump cost $3.73 on average nationwide, down from $3.78 last week, but still far higher than the $2.71 drivers paid last year, according to the AAA Fuel Gauge Report.

In metals, gold gained $4.00, or 0.26%, to $1,543 a troy ounce.  Silver jumped 80 cents, or 2.2%, to $37.42 a troy ounce.

Corporate News

Citigroup (NYSE:C) said hackers breached its computer network, accessing bank card records of 200,000 North American customers.

Texas Instruments (NYSE:TI) cuts its earnings and revenue forecast, blaming soft sales to Nokia, a major client, as the cause.

Goldman Sachs (NYSE:GS) is being investigated by U.S. regulators over potentially violating bribery laws in dealings with Libya's sovereign-wealth fund, according to a report by The Wall Street Journal.

Foreign Markets

The English FTSE 100 was up 0.81% to 5,856, the French CAC 40 climbed 1.1% to 3,879 and the German DAX gained 1.4% to 7,160.

In Asia, the Japanese Nikkei 225 edged higher by 0.19% to 9,467 and the Chinese Hang Seng fell 0.23% to 22,610.