Wall St. jumps for second day, helped by economic optimism
By Caroline Valetkevitch
NEW YORK (Reuters) – U.S. stocks rallied for a second day on Thursday, boosted by expectations the U.S. economy will continue to improve and by hopes for more aggressive action from the European Central Bank.
The S&P 500 added 3 percent over the last two sessions, retracing most of its 4.2 percent loss in the previous five trading days, leaving the index in positive territory for 2015. The Dow and Nasdaq also turned up for the year so far.
The advance was broad, with the S&P materials, energy and technology sectors each rising more than 2 percent, leading the day’s gains.
Though slightly above expectations, initial claims for state unemployment benefits slipped from the prior week, pointing to a firming labor market ahead of Friday’s key monthly payrolls report.
“We’re at the point where the jobs reports have been coming in consistently in the 200,000 or 200,000-plus range. I think that just keeps the Fed on track for everything we’re expecting,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
Friday’s December jobs report is expected to show 240,000 non-farm payrolls added.
Also boosting sentiment, continued weak euro zone data has been lifting optimism that the European Central Bank will take more aggressive action.
U.S. crude oil, whose free-fall was among the catalysts for the recent selloff in stocks, gained for a second day, settling at $48.79 per barrel. The S&P energy index rose 2.2 percent.
Signs that oil prices may be stabilizing have boosted investor sentiment, although market analysts were still not ready to say prices had found a floor.
The Dow Jones industrial average rose 323.35 points, or 1.84 percent, to 17,907.87, the S&P 500 gained 36.24 points, or 1.79 percent, to 2,062.14 and the Nasdaq Composite added 85.72 points, or 1.84 percent, to 4,736.19.
The S&P 500’s two-day gains were its biggest since the Dec. 17-18 Federal Reserve-fueled rally of 4.5 percent. Minutes from that December Fed meeting released Wednesday reassured investors the central bank was in no hurry to start raising interest rates.
The S&P also snapped back above its 50-day average, a technical support level it fell below on Monday.
“Weak hands are being forced to chase. There’s a fear of missing out on the rally,” O’Rourke said.
About 7.1 billion shares changed hands on U.S. exchanges, above the 6.7 billion average for the last five sessions, according to BATS Global Markets.
Biotechs were among the most active shares. Bind Therapeutics shares surged 37.1 percent to $7.06, a day after the company said it enrolled its first patient in a mid-stage trial for its lung cancer drug.