By Anora Mahmudova and Sara Sjolin, MarketWatch
Whole Foods slides nearly 10% after reporting earnings
U.S. stocks closed higher on Thursday, recovering some of the
losses from the previous two sessions, as turbulence in bond
markets in the U.S. and in Europe appeared to subside.
A stronger-than-expected weekly jobless-claims report, showing
layoffs remain at 15-year lows, set the tone for the Friday's
highly-anticipated nonfarm-payrolls report.
The S&P 500 (SPX) closed 7.85 points, or 0.4%, higher at
2,088. Apart from the energy sector, which was hit following a drop
in oil prices, nine of the main 10 sector finished higher. The Dow
Jones Industrial Average (DJI) gained 82.08 points, or 0.5%, to
17,924.06. The Nasdaq Composite (RIXF) added 25.90 points, or 0.5%,
to 4,945.54.
Colin Cieszynski, chief market strategist at CMC Markets, said
the stock market is likely to trade sideways for some time.
"Markets have rallied so much, that there are excesses which
either need to be flushed out in a correction or trade sideways for
the rest of the year and the let the economy catch up," Cieszynski
said.
"At this points, the reaction to the jobs report will depend on
whether people think a strong reading is good news because the
economy is doing better or whether people think a weak reading is
good news because the interest rates will remain low for longer,"
Cieszynski added.
"When market have been trading sideways for the past four
months, it gets confusing," he noted.
Earlier investors remained on the sidelines following big
fluctuations in government bond markets in the U.S. and much of
Europe, while losses in the energy sector kept a lid on the S&P
500 and Dow.
Bruce McCain, chief investment strategist at Key Private Bank,
said the stock market valuations are high and are likely to keep
rising due to continued demand from investors who are searching for
yield in current environment.
"The higher the markets rise, the harder the fall is going to
be. But lack of alternative investments may keep pushing investors
into equities for some time," McCain noted.
Global equity markets earlier suffered sharp moves following a
jump in German bond yields. The yield on 10-year German Bunds
jumped as high as 22 basis points to 0.8%, but has pared its gains
to trade unchanged at 0.64%. U.S. 10-year Treasury yields rose 6
basis points to 2.18%.
Data: The number of people applying for U.S. unemployment
benefits remains near a 15-year low, rising a scant 3,000 to
265,000 in the seven days stretching from April 26 to May 2, well
below economists' forecasts.
The data come a day ahead of the top-tier nonfarm-payrolls
report, which is closely watched by the Fed to assess the best time
for a first rate hike. Payrolls were very disappointing in March,
with only 126,000 jobs added to the economy, but forecasts are for
a pickup to 233,000 in April.
Earnings:Whole Foods Market Inc. (WFM) reported after
Wednesday's closing bell, posting sales that fell short of
forecasts. Shares fell 9.7%, making it the biggest decliner on the
S&P 500.
Reporting ahead of the bell, Priceline(PCLN) posted
better-than-expected first-quarter profit, but gave a soft outlook
for the current quarter. Shares fell 4%.
Alibaba (BABA) said revenue rose 45% during its fourth fiscal
quarter
(http://www.marketwatch.com/story/seaworld-loss-narrows-sales-beat-estimates-2015-05-07),
helping send the shares up 7.5%.
SeaWorld Entertainment Inc. (SEAS), which is still struggling
with an image problem after the documentary "Blackfish", said its
loss narrowed in the first quarter
(http://www.marketwatch.com/story/seaworld-loss-narrows-sales-beat-estimates-2015-05-07),
while sales beat estimates. The stock fell 2.1%.
Movers and shakers: Shares of Zynga Inc.(ZNGA) gained 7.3% after
the online game maker late Wednesday posted better-than-expected
first-quarter earnings
(http://www.marketwatch.com/story/zynga-stock-climbs-on-strong-quarter-job-cuts-2015-05-06)
and announced plans to cut 18% of its workforce.
Tesla Motors Inc.(TSLA) shares rose 2.8% after
better-than-expected first-quarter results reported on
Wednesday.
Other markets: U.K. stocks fell
(http://www.marketwatch.com/storyno-meta-for-guid) as investors
took a hands-off approach on the day of the highly anticipated
general election. Read: 7 things you need to know about the U.K.
election
(http://www.marketwatch.com/story/7-things-you-need-to-know-about-the-uk-election-2015-05-06)
(http://www.marketwatch.com/story/7-things-you-need-to-know-about-the-uk-election-2015-05-06)
(http://www.marketwatch.com/story/7-things-you-need-to-know-about-the-uk-election-2015-05-06)
Stocks in Asia closed sharply
(http://www.marketwatch.com/story/asia-stocks-fall-after-yellen-warning-2015-05-06-231033824)
lower following Federal Reserve Chairwoman Janet Yellen's warning
on stock valuation
(http://www.marketwatch.com/story/yellen-says-stock-valuations-are-quite-high-2015-05-06),
while European markets were mixed amid
(http://www.marketwatch.com/story/asia-stocks-fall-after-yellen-warning-2015-05-06-231033824)
a bout of volatility in the bond market.
Oil futures
(http://www.marketwatch.com/story/crude-oil-slips-on-jitters-over-supply-us-jobs-data-2015-05-07)(CLM5)
fell sharply to settle 3.3% lower at $58.94 a barrel. Gold futures
(http://www.marketwatch.com/story/gold-adds-to-losses-after-strong-jobless-claims-report-2015-05-07)settled
0.7% lower at $1,182.20 an ounce . The ICE dollar index (DXY) rose
0.6% to 94.62.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires