Stocks up after good jobs report
Stocks rose on Wall Street Thursday after reports suggested the US is maintaining a slow but steady economic recovery. Some retail stocks were among the biggest gainers.
Stocks edged higher Thursday after a pair of reports provided more evidence that the U.S. is maintaining a slow but steady economic recovery.Skip to next paragraph
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The number of Americans seeking unemployment benefits dropped last week and is near the lowest level since June 2008, the Labor Department said Thursday. Weekly applications are just 1,000 above a five-year low reached last month.
Also, a survey from the payroll company ADP showed that American businesses added 176,000 jobs in August, fewer than in June and July but roughly in line with the monthly average for the year.
The encouraging reports came one day before the government releases its closely watched employment survey for August. Many investors believe that a strong report will ensure that Federal Reserve policymakers will decide to reduce, or "taper," economic stimulus at their meeting later this month.
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The U.S. central bank is buying $85 billion in bonds a month to keep long-term interest rates low and to stimulate the economy. Fed stimulus has helped drive a bull market in stocks that has lasted more than four years.
"The data is shaping up that the Fed probably lays out a tapering schedule in September," said Phil Orlando, chief equity market strategist at Federated Investors.
While stock markets may be volatile in the coming weeks, investors will ultimately regard the cut in stimulus as a positive sign because it means that the economy is strengthening, Orlando said. "It should leave stocks in great shape."
The Dow Jones industrial average rose 6.61 points, or less than 0.1 percent, to 14,937.48. The Standard & Poor's 500 index rose two points, or 0.1 percent, to 1,655.08. The Nasdaq composite gained 9.74 points, or 0.3 percent, to 3,658.78.
Some retail stocks were among the biggest gainers.
Costco rose $3.12, or 2.8 percent, to $114.62 after the discount store chain said revenue at stores open at least a year rose 4 percent in August, slightly faster than Wall Street's expectations. Walgreen's also gained after reporting a strong rise in sales last month. Walgreen's rose 70 cents, or 1.4 percent, to $50.19 after reporting a 4.8 percent increase in sales.