Wall Street rose today as investors bought back into stocks after two days of losses, encouraged by a drop in unemployment claims and a...
NEW YORK — Wall Street rose today as investors bought back into stocks after two days of losses, encouraged by a drop in unemployment claims and a better-than-expected sales performance by discount retailers.
The Dow Jones industrial average rose 54.72 to 12,581.98.
Microsoft, one of the 30 Dow stocks, gained 22 cents to close at $29.11 a share. Boeing, also a Dow stock, fell 17 cents to $78.43.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 6.06 to 1,360.55, and the Nasdaq composite index rose 29.58 to 2,351.70.
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Although last week the Labor Department said the four-week average of initial unemployment claims rose to a two-and-a-half-year high, investors were pleased to hear that new claims fell last week by more than expected, following a surge the previous week.
And while many retailers — from Gap to Saks — said today that March sales slid as consumers grew more frugal, Wall Street was encouraged that other companies are weathering the economic weakness. Discount retailers Wal-Mart and Costco Wholesale, stores that sell staples like food and gasoline, reported sharp increases in March sales and indicated they expect sales to keep rising.
“The jobless claims snapped back down following the sharp rise last week. Combined with the news from Wal-Mart, it suggests that the consumer may be able to muddle through. That’s providing some support for an otherwise strained market,” said Alan Gayle, senior investment strategist for RidgeWorth Capital Management.
Questions about the health of the global financial system ahead of next week’s bank earnings, however, continue to provide a troubling backdrop for the market. Lehman Brothers disclosed in a regulatory filing Wednesday that it liquidated three funds because of the tight credit markets and brought the assets of those funds, valued at $1 billion, onto its books Feb. 29. The investment bank said it also purchased deteriorated assets valued at $800,000 from other distressed funds.
“We think everything is better, and then we get another surprise. Every credit rock we turn over has something else crawl out from under it,” Gayle said.