Stocks post mild gains following economic data
NEW YORK (AP) — Positive news on the U.S. economy outweighed worries about Syria Thursday, sending the stock market higher for a second straight day.
The Dow Jones industrial average added 16.44 points, or 0.1 percent, to 14,840.95, while the Standard & Poor’s 500 index rose 3.2 points, or 0.2 percent, to 1,638.17. The Nasdaq composite posted a bigger gain, rising 27 points, or 0.8 percent, to 3,620.30.
The Dow has gained 64 points over the past two days, not nearly enough to make up for its 170-point loss Tuesday as tensions over Syria rattled markets.
Verizon Communications was the biggest gainer among the blue chips after Britain’s Vodafone confirmed it was in talks with Verizon to sell its 45 percent stake their joint venture, Verizon Wireless.
Verizon rose $1.26, or 2.7 percent, to $47.82. The U.S.-listed shares of Vodafone rose $2.39, or 8.1 percent, to $31.80.
While many fund managers said they’re not looking to jump back into the market just yet, some individual companies are looking attractive again.
“If you’re a long-term investor, it’s an opportunity,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which has $1.9 billion under management. He noted a new investment, the retail chain PetSmart, as an example.
Wayne Wilbanks, chief investment officer at the asset management firm Wilbanks, Smith & Thomas, said the market might have fallen too quickly. He also cautioned that the gains from the last two days may not last.
“Be very careful,” Wilbanks said. “You haven’t missed out on much if you’ve sat on the sidelines since May. I’m not putting a lot of money to work here.”
Traders had two good economic reports to parse through Thursday. The U.S. economy grew at a 2.5 percent annual rate from April through June, much faster than previously estimated, the government said. Also, the Labor Department said the number of people who filed for unemployment benefits last week fell to 331,000, the fewest in five years.
While lower unemployment claims and an upward revision on GDP are both positive signs, most of Wall Street’s attention is focused on next week, when the August jobs report will be released. The Federal Reserve is expected to decide the fate of its massive bond-buying program in mid-September, and the jobs survey will be the last bit of significant economic data the Fed will have to consider before making its decision.
Traders also continue to watch Syria, where a U.S.-led attack could happen, although such a strike seems less imminent than earlier in the week. Oil fell to below $109 a barrel Thursday.
“The general feeling is that Syrian tensions have eased a bit,” said Alec Young, global equity strategist with S&P Capital IQ.
The price of crude oil fell $1.30, or 1.2 percent, to $108.80 a barrel. Oil had climbed as high as $112 earlier this week.
Energy-related stocks fell. Exxon Mobil slipped 2 percent and Chevron fell 1 percent.
Investors worry that a limited strike could drag the U.S. and its allies into that nation’s civil war, or worse, set off a regional conflict in an area where so much of the world’s oil is located.
Beyond the news about Syria, it has been a mostly quiet week for stocks. Traders are winding down during the last week of summer and heading out for the Labor Day holiday this weekend.
Trading volume on the New York Stock Exchange thin: 2.5 billion shares compared with a recent average of 3.4 billion shares.
Wilbanks said he doesn’t expect the market to move substantially higher, citing the mediocre second-quarter earnings that U.S. companies just finished reporting.
“We’re going to need to see robust corporate profit growth to move the market higher,” he said.
In other corporate news, teen clothing store operator Guess jumped $3.51, or 13 percent, to $30.82 after the company reported second-quarter profit and revenue late Wednesday that blew past the expectations of Wall Street analysts. The retailer also raised its profit forecast for the year.
Campbell Soup fell $1.38, or 3 percent, to $43.33 after posting a loss for its fiscal fourth quarter. The company’s results were dragged down by a charge related to the potential sale of a European business. While the results topped Wall Street’s estimates, revenue missed expectations.