By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica
ConocoPhillips rallies, Lululemon tanks
U.S. stocks rose on Thursday as financial shares rallied
following a positive reading of economic growth.
The Dow Jones Industrial Average traded was last up 70 points,
or 0.3%, at 20,729, with shares of UnitedHealth Group Inc.(UNH),
Goldman Sachs Group Inc.(GS), and Wal-Mart Stores Inc.(WMT) leading
gainers.
The S&P 500 index traded up 7 points, or 0.3%, to 2,367,
with nine out of the index's 11 sectors in the green, led by the
financials and industrial sectors.
The Nasdaq Composite Index climbed 17 points, or 0.3%, to 5,914,
with the tech-heavy index on track to close at a fresh all-time
high and aiming for a fifth straight finish in positive
territory.
Following a lackluster start to trading, all three benchmarks
have been trading solidly higher.
Earlier, the government said the U.S. economy, as measured by
gross domestic product, expanded at a 2.1% annualized pace
(http://www.marketwatch.com/story/fourth-quarter-gdp-raised-to-21-corporate-profits-rise-again-2017-03-30)
in the fourth quarter, slightly faster than the previously reported
1.9% rate. Separately, jobless claims fell by 3,000
(http://www.marketwatch.com/story/jobless-claims-dip-3000-to-258000-in-late-march-2017-03-30)
to 258,000 in the latest week, near their lowest level in
decades.
"This is a market that looks like it may be gaining some
traction as we go into the end of the month. The upward revision to
GDP suggests economic momentum, and that's providing some lift,"
said Alan Gayle, senior investment strategist at RidgeWorth
Investments.
The data helped support financial stocks, which are closely
correlated to the pace of economic growth and were the biggest
gainers in S&P 500 on the day, up 1.3%. Regional banks in
particular enjoyed sharp moves higher, highlighted by a 2.5% gain
for Zions Bancorp (ZION) while Regions Financial (RF) was up 2.6%.
The SPDR S&P Regional Banking ETF (KRE) popped 3.1%.
With the day's move, the S&P 500 moved into positive
territory for March, up 0.2%. The Dow remains down 0.4% for the
month, while the Nasdaq is on pace for a 1.5% March return.
Overall, recent gains have been slight, and of the past seven
sessions for the S&P 500, not including Thursday, only one has
ended with a move greater than 0.2% in either direction. This
rangebound trading may be a sign that recent upward momentum on
Wall Street may be stalling, even as major indexes continue to
trade near records, strategists say.
Muted trading has been the norm since Friday when the
Republican-led health-care bill was pulled from the House floor
after the White House was unable to overcome resistance from a
conservative GOP faction, the House Freedom Caucus. The failure
raised questions about Trump administration's ability to pass its
economic agenda, which had been seen as market friendly.
With many investors expecting a correction triggered by a policy
failure, that lowers the possibility that one such correction will
actually happen, seeing that "corrections tend to occur when you
least expect them," said Brian Belski, chief investment strategist,
at BMO Capital Markets, in a note Thursday.
"Instead, we believe stock prices are likely to bounce
back-and-forth in the coming months as investors work through the
potential 'negatives' associated with policy rhetoric and the
'positives' of the improving macro and earnings growth
environment," Belski said.
"If Congress gets bogged down with its tax and spending plans,
as it is often plagued to do, that could leave the market quite
vulnerable," Gayle said. "We need to see some tangible progress in
the second quarter, otherwise confidence will erode."
Read: Here's what would happen during a government shutdown
(http://www.marketwatch.com/story/heres-what-would-happen-during-a-government-shutdown-2017-03-29)
Fed speakers: Cleveland Fed President Loretta Mester forecast
GDP growth above 2% in 2017, and sees a "sustained return" to 2%
inflation "over the next year or so." Mester also expects the Fed
to raise interest rates again this year, but didn't say how many
times might be likely. Currently, market participants anticipate
three or four hikes in total over 2017.
Stock movers: Cenovus Energy Inc.(CVE) fell 13% after
ConocoPhillips (COP) said it would sell the majority its Canadian
oil-sands assets to the oil company
(http://www.marketwatch.com/story/conocophillips-shares-rally-on-sale-of-oil-sands-interest-to-cenovus-2017-03-29).
(http://www.marketwatch.com/story/conocophillips-shares-rally-on-sale-of-oil-sands-interest-to-cenovus-2017-03-29)
ConocoPhillips shares were up 7%.
Lululemon Athletica Inc.(LULU) shares tumbled 23% as several
analysts cut price-targets on the retailer, which forecast lower
profit and sales in the first quarter
(http://www.marketwatch.com/story/shares-of-lululemon-tank-as-retailer-calls-for-lower-profit-sales-in-q1-2017-03-29)
and missed fourth-quarter earnings expectations.
Apple Inc.(AAPL) traded off between slight gains and losses as
the largest U.S. company closed at a record
(http://www.marketwatch.com/story/apple-closes-at-yet-another-record-high-2017-03-29)for
the second straight day on Wednesday. That was also its sixth
record thus far in March.
Read:Tesla now lets you doodle in your car
(http://www.marketwatch.com/story/tesla-now-lets-you-doodle-in-your-car-2017-03-29)
Other markets: European stocks finished higher
(http://www.marketwatch.com/story/european-stocks-edge-higher-to-flirt-with-2-year-high-2017-03-30),
with Germany's DAX reaching its highest close since April 2015. In
Asia , equities saw broad losses
(http://www.marketwatch.com/story/confused-asian-markets-sag-though-energy-stocks-post-gains-2017-03-29),
with the Nikkei 225 index closing 0.8% lower.
Gold prices
(http://www.marketwatch.com/story/gold-trades-lower-on-pace-for-3rd-straight-decline-2017-03-30)
fell 0.7%, while oil prices
(http://www.marketwatch.com/story/oil-prices-make-steady-gains-after-rallying-to-a-three-week-high-2017-03-30)
rose 1.6%, with West Texas Intermediate oil trading on the New York
Mercantile Exchange moving above $50 a barrel.
The euro extended its decline against the dollar
(http://www.marketwatch.com/story/pound-eases-slightly-as-investors-weigh-the-brexit-future-2017-03-30),
after a Reuters report that European Central Bank policy makers
want to tamp down expectations for their policy announcement in
April.
See:Euro bulls just got a wake-up call from the ECB
(http://www.marketwatch.com/story/euro-bulls-just-got-a-wake-up-call-from-the-ecb-2017-03-30)
--Barbara Kollmeyer in Madrid contributed to this article.
(END) Dow Jones Newswires
March 30, 2017 14:04 ET (18:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.