S&P 500 hits record, focus shifts to payrolls

US stocks rose on Thursday, with the S&P 500 hitting a record for the seventh time in eight sessions, after the European Central Bank cut rates to record lows and pledged to do more if needed to fight off the risk of deflation.

Also helping stocks: hedge fund manager David Tepper was reported by CNBC as saying the ECB move partly "alleviated" his concerns about the market, after having said last month he was worried stock prices were stretched.

The ECB cut the deposit rate to -0.10% and launched a series of measures to pump money into the sluggish euro zone economy. It stopped short of full-fledged quantitative easing (QE) - printing money to buy assets - but ECB President Mario Draghi said more action would come if necessary.

"A lot of people were short, expecting a pullback coming into the ECB decision," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "I think people were positioned for things to be underwhelming."

Investors are now focused on Friday's US payrolls report for May. It is expected to show job growth slowed last month and the unemployment rate ticked up, but not by enough to upset the view that the economy is bouncing back.

The number of Americans filing new claims for unemployment benefits rose last week, but the underlying trend continued to point to a firming labor market.

"The number of data we got this week so far on the labor market have not provided a clear direction for tomorrow's numbers," said Randy Frederick, managing director of trading and derivatives with the Schwab Center for Financial Research in Austin.

"So I wouldn't be surprised if the market sold on the (payrolls) news tomorrow, but it's likely to just be a knee-jerk reaction."

The Dow Jones industrial average rose 95.3 points or 0.57%, to 16,832.83, the S&P 500 gained 11.81 points or 0.61%, to 1,939.69 and the Nasdaq Composite added 42.54 points or 1%, to 4,294.18.

Zynga Inc shares fell 10% to $2.95 on heavy volume. Chief Executive Don Mattrick said late Wednesday the mobile game company was "nowhere near where we should ultimately be" with margins on its earnings before interest, taxes, depreciation, and amortization.

Sprint has agreed to pay about $40 per share to buy T-Mobile US, marking further progress in the attempt to merge the third and fourth-biggest US mobile network operators, a person familiar with the matter told Reuters on Wednesday. Sprint shares fell 3.5% to $9.07 while T-Mobile US dropped 2.8% to $33.33.

Rite Aid shares slid 7.8% to $7.84 after it estimated first-quarter profit much below expectations.

Ciena Corp shares jumped 18.3% to $22.47 after the company posted earnings that beat expectations and gave a revenue outlook above forecasts.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Child abuse needs to be tackled with the seriousness it deserves

    The Bangalore rape case has again brought into focus an issue we Indians forever shy away from facing up to — child sexual abuse.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

<b>Riskfactor</b>: THE BASE RATE BIAS

Base rate fallacy, also called base rate neglect or base ...

Parvez Imam

Revisiting history can do us all good

We often think that we understand history. We read it ...

Bubbles Sabharwal

Your happiness doesn’t depend on your needs

They are two different words (and even worlds) altogether: having ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture