Stocks ended higher on Thursday after the Bank of Japan announced aggressive policies to lift its economy, but weak jobs data in the United States capped gains.
The Bank of Japan’s surprising stimulus plan came with supportive comments from officials in Europe and at the Federal Reserve, suggesting that central bank actions will continue supporting the world’s economy to the benefit of stocks. Interest rates seemed to respond to the stimulus.
The Treasury’s benchmark 10-year note rose 15/32, to 102 4/32, and the yield fell to 1.77 percent from 1.82 percent late Wednesday.
The iShares MSCI Japan Index exchange-traded fund jumped 4 percent, to $10.89, while United States-listed shares of Toyota climbed 4.7 percent, to $105.63 and WisdomTree Japan, another exchange-traded fund, rose 7.5 percent, to $43.88.
The Fed’s stimulus, along with signs of improvement in the United States economy, have helped stocks rally since the start of the year. While the Standard Poor 500-stock index is up 9.4 percent since the start of the year and broke its nominal closing record last week, it has yet to surpass its intraday high of 1,576.09, and this week investors have mostly pulled back.
“The Fed officials certainly have been going out of their way to point out that they’re staying the course and sticking with their program, which has probably been reassuring for markets,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Ill.
An unexpected jump in weekly jobless claims to a four-month high raised questions about the labor market’s recovery a day ahead of the Labor Department’s widely watched monthly jobs report. A report on Wednesday showed that in March United States companies hired at the slowest rate in five months.
The Dow Jones industrial average was up 55.76 points, or 0.38 percent, at 14,606.11. The S. P. 500 index gained 6.29 points, or 0.40 percent, to 1,559.98. The Nasdaq composite index was up 6.38 points, or 0.20 percent, at 3,224.98.
Among the latest comments from Fed officials, Dennis P. Lockhart, president of the Atlanta Fed, suggested the program to stimulate the economy would continue for at least a few more months. Charles Evans, head of the Chicago Fed, said rates could stay at rock bottom until the unemployment rate fell to 5.5 percent. The rate was 7.7 percent in February.
The European Central Bank president, Mario Draghi, opened the door to an interest rate cut as soon as next month.
The retailer Best Buy rose 16.1 percent, to $25.13, after saying it would offer a 30 percent discount on Apple iPad 3 tablets in the United States.
Shares of Facebook rose 3.1 percent, to $27.07, after the company introduced applications that let users display versions of their Facebook newsfeed and messages on the home screen of a wide range of devices based on Google’s Android system.
Analysts said Facebook’s move could divert users from Google’s services. Its shares fell 1.4 percent, to $795.07.
The report about jobless claims was the latest bit of disappointing economic news. Claims jumped to 385,000 in the latest week, confounding expectations that claims would drop by 7,000, to 350,000.
Friday’s labor report was expected to show 200,000 jobs were created last month, according to a Reuters survey. The unemployment rate was expected to remain at 7.7 percent.
Earnings forecasts have declined heading into first-quarter reports, which are set to begin next week with Alcoa. S. P. 500 earnings are expected to rise just 1.6 percent from a year ago, according to Thomson Reuters data, down from a Jan. 1 growth forecast of 4.3 percent.
If a majority of results beats expectations, as has been the trend, “There’s a good chance we could see the markets resume their upward trend,” said Mr. Jankovskis.
Stocks Step Ahead Despite Claims Data
Stocks ended higher on Thursday after the Bank of Japan announced aggressive policies to lift its economy, but weak jobs data in the United States capped gains.
The Bank of Japan’s surprising stimulus plan came with supportive comments from officials in Europe and at the Federal Reserve, suggesting that central bank actions will continue supporting the world’s economy to the benefit of stocks. Interest rates seemed to respond to the stimulus.
The Treasury’s benchmark 10-year note rose 15/32, to 102 4/32, and the yield fell to 1.77 percent from 1.82 percent late Wednesday.
The iShares MSCI Japan Index exchange-traded fund jumped 4 percent, to $10.89, while United States-listed shares of Toyota climbed 4.7 percent, to $105.63 and WisdomTree Japan, another exchange-traded fund, rose 7.5 percent, to $43.88.
The Fed’s stimulus, along with signs of improvement in the United States economy, have helped stocks rally since the start of the year. While the Standard Poor 500-stock index is up 9.4 percent since the start of the year and broke its nominal closing record last week, it has yet to surpass its intraday high of 1,576.09, and this week investors have mostly pulled back.
“The Fed officials certainly have been going out of their way to point out that they’re staying the course and sticking with their program, which has probably been reassuring for markets,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Ill.
An unexpected jump in weekly jobless claims to a four-month high raised questions about the labor market’s recovery a day ahead of the Labor Department’s widely watched monthly jobs report. A report on Wednesday showed that in March United States companies hired at the slowest rate in five months.
The Dow Jones industrial average was up 55.76 points, or 0.38 percent, at 14,606.11. The S. P. 500 index gained 6.29 points, or 0.40 percent, to 1,559.98. The Nasdaq composite index was up 6.38 points, or 0.20 percent, at 3,224.98.
Among the latest comments from Fed officials, Dennis P. Lockhart, president of the Atlanta Fed, suggested the program to stimulate the economy would continue for at least a few more months. Charles Evans, head of the Chicago Fed, said rates could stay at rock bottom until the unemployment rate fell to 5.5 percent. The rate was 7.7 percent in February.
The European Central Bank president, Mario Draghi, opened the door to an interest rate cut as soon as next month.
The retailer Best Buy rose 16.1 percent, to $25.13, after saying it would offer a 30 percent discount on Apple iPad 3 tablets in the United States.
Shares of Facebook rose 3.1 percent, to $27.07, after the company introduced applications that let users display versions of their Facebook newsfeed and messages on the home screen of a wide range of devices based on Google’s Android system.
Analysts said Facebook’s move could divert users from Google’s services. Its shares fell 1.4 percent, to $795.07.
The report about jobless claims was the latest bit of disappointing economic news. Claims jumped to 385,000 in the latest week, confounding expectations that claims would drop by 7,000, to 350,000.
Friday’s labor report was expected to show 200,000 jobs were created last month, according to a Reuters survey. The unemployment rate was expected to remain at 7.7 percent.
Earnings forecasts have declined heading into first-quarter reports, which are set to begin next week with Alcoa. S. P. 500 earnings are expected to rise just 1.6 percent from a year ago, according to Thomson Reuters data, down from a Jan. 1 growth forecast of 4.3 percent.
If a majority of results beats expectations, as has been the trend, “There’s a good chance we could see the markets resume their upward trend,” said Mr. Jankovskis.
Article source: http://www.nytimes.com/2013/04/05/business/daily-stock-market-activity.html?partner=rss&emc=rss