U.S. Stocks Rise After Slew Of Data
NEW YORK (MarketWatch) - U.S. stocks rose on Thursday, extending the prior session's rally, bolstered by mostly upbeat economic data, although the advance was somewhat capped by news that General Motors Corp.'s first-quarter profit suffered a year-over-year decline of 90%.
The Dow Jones Industrial Average was down 1.2 points at 13,210, lifted by gains in shares of Verizon Corp. and Intel Corp. .
But GM weighed on the blue-chip average, falling 3.3% after its quarterly results widely missed forecasts.
IBM , also in the Dow, gained 0.6% after saying it has used a nanotechnology process to make computer chips for the first time in a production setting, advancing the race to boost the power and energy efficiency of semiconductors.
The S&P 500 was up 5.6 points at 1,501, crossing the key level for the first time since September 2000.
The Nasdaq Composite rose 5.1 points to 2,562.
Trading volumes showed 487 million shares exchanging hands on the New York Stock Exchange and 697 million on the Nasdaq stock market. Advancing issues outpaced decliners by 19 to 10 on the NYSE, while they barely outpaced decliners on the Nasdaq.
By sector, airlines , transportation and software led the gains. Meanwhile, gold , biotechnology and oil services fell.
The market received a boost before the open, after new data showing stronger-than-expected productivity and below-forecast labor costs were supportive of stocks.
Strong productivity points to economic health while contained labor costs suggest that the Federal Reserve may be able to ease its monetary policy.
"It's obviously good news that wage pressure was contained," said Peter Cardillo, chief market economist at Avalon Partners. "So far we've had pretty good surprises, showing the economy growing at a moderate pace and escaping negative growth."
The Labor Department said productivity of the U.S. non-farm business sector rose at a 1.7% annual rate in the first quarter, well above a MarketWatch forecast of a 0.8% gain.
Unit labor costs - a key inflationary signal - rose at an annual rate of 0.6% in the first quarter. This was well-below expectations of a 2.1% increase.
Investors also were heartened after the Institute of Supply Management said its service-sector index rose to a higher than expected level of 56% in April from 52.4% in March. Economists expected the index to rise to 53.3%.
On Wednesday stocks rallied, lifting the Dow Jones Industrial Average to a record, thanks to deal speculation in the media sector, stronger-than-expected factory data, and Time Warner Inc.'s earnings report.
Stocks in motion
CBS Corp.'s rose 1.2% after its quarterly profit fell 5.9%, although its adjusted earnings per share were a shade above analysts' expectations.
In other corporate news, Russia's Norilsk Nickel, the world's largest nickel producer, offered to buy Canada's LionOre Mining International for C$5.3 billion ($4.8 billion), or C$21.50 per share, in cash, seeking to break up Xstrata's agreement to buy the company. The offer price trumps Xstrata's offer of C$18.50 a share.
Other markets
Treasury prices pared gains after the productivity report. The bond market responds positively to signs of contained inflation, but is made skittish by indications of strong productivity, which tend to diminish interest in low-risk assets.
The 10-year benchmark Treasury note last was down 6/32 at 99-20/32 with a yield of 4.678%.
The dollar pared some of its losses against the euro and yen after the data. Strong productivity enhances the dollar's attractiveness against its major rivals. The euro was last up 0.07% at $1.3599, while the dollar was down 0.02% at 120.16 yen.
Crude-oil futures were erratic, as news of fresh violence at oil installations in Nigeria offset some of the pressure from a U.S. supply report that showed a second weekly rse in crude inventories.
In addition, a fire forced the partial closure of an Exxon Mobil refinery with a capacity of 115,000 barrels a day. The June crude contract last was down 51 cents at $63.17 a barrel.
The June gold futures contract rose $2.90 to $678 an ounce.
By Leslie Wines
MarketWatch The Dow Jones Industrial Average was down 1.2 points at 13,210, lifted by gains in shares of Verizon Corp. and Intel Corp. .
But GM weighed on the blue-chip average, falling 3.3% after its quarterly results widely missed forecasts.
IBM , also in the Dow, gained 0.6% after saying it has used a nanotechnology process to make computer chips for the first time in a production setting, advancing the race to boost the power and energy efficiency of semiconductors.
The S&P 500 was up 5.6 points at 1,501, crossing the key level for the first time since September 2000.
The Nasdaq Composite rose 5.1 points to 2,562.
Trading volumes showed 487 million shares exchanging hands on the New York Stock Exchange and 697 million on the Nasdaq stock market. Advancing issues outpaced decliners by 19 to 10 on the NYSE, while they barely outpaced decliners on the Nasdaq.
By sector, airlines , transportation and software led the gains. Meanwhile, gold , biotechnology and oil services fell.
The market received a boost before the open, after new data showing stronger-than-expected productivity and below-forecast labor costs were supportive of stocks.
Strong productivity points to economic health while contained labor costs suggest that the Federal Reserve may be able to ease its monetary policy.
"It's obviously good news that wage pressure was contained," said Peter Cardillo, chief market economist at Avalon Partners. "So far we've had pretty good surprises, showing the economy growing at a moderate pace and escaping negative growth."
The Labor Department said productivity of the U.S. non-farm business sector rose at a 1.7% annual rate in the first quarter, well above a MarketWatch forecast of a 0.8% gain.
Unit labor costs - a key inflationary signal - rose at an annual rate of 0.6% in the first quarter. This was well-below expectations of a 2.1% increase.
Investors also were heartened after the Institute of Supply Management said its service-sector index rose to a higher than expected level of 56% in April from 52.4% in March. Economists expected the index to rise to 53.3%.
On Wednesday stocks rallied, lifting the Dow Jones Industrial Average to a record, thanks to deal speculation in the media sector, stronger-than-expected factory data, and Time Warner Inc.'s earnings report.
Stocks in motion
CBS Corp.'s rose 1.2% after its quarterly profit fell 5.9%, although its adjusted earnings per share were a shade above analysts' expectations.
In other corporate news, Russia's Norilsk Nickel, the world's largest nickel producer, offered to buy Canada's LionOre Mining International for C$5.3 billion ($4.8 billion), or C$21.50 per share, in cash, seeking to break up Xstrata's agreement to buy the company. The offer price trumps Xstrata's offer of C$18.50 a share.
Other markets
Treasury prices pared gains after the productivity report. The bond market responds positively to signs of contained inflation, but is made skittish by indications of strong productivity, which tend to diminish interest in low-risk assets.
The 10-year benchmark Treasury note last was down 6/32 at 99-20/32 with a yield of 4.678%.
The dollar pared some of its losses against the euro and yen after the data. Strong productivity enhances the dollar's attractiveness against its major rivals. The euro was last up 0.07% at $1.3599, while the dollar was down 0.02% at 120.16 yen.
Crude-oil futures were erratic, as news of fresh violence at oil installations in Nigeria offset some of the pressure from a U.S. supply report that showed a second weekly rse in crude inventories.
In addition, a fire forced the partial closure of an Exxon Mobil refinery with a capacity of 115,000 barrels a day. The June crude contract last was down 51 cents at $63.17 a barrel.
The June gold futures contract rose $2.90 to $678 an ounce.
By Leslie Wines
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