By Kristina Peterson
U.S. stocks climbed Thursday, boosted by a larger-than-expected
decline in jobless claims and strong same-store sales from a
handful of retailers.
After breaking above the 10,000 level on Thursday, the Dow Jones
Industrial Average (DJI) rose 96 points, or 1%, to 10,114, in early
trading, with all of its components in the black. Leading the
measure, economically-sensitive General Electric rose 3.2%.
American Express rose 1.9% and DuPont gained 1.7%. Caterpillar rose
1.6%.
Boeing rose 1% after saying it will acquire Argon ST, a
privately held software company specializing in protecting large
Internet protocol networks from being attacked.
The Nasdaq Composite (RIXF) rose 1% to 2180. The Standard &
Poor's 500-share index (SPX) rose 1% to 1,071, led by its
industrials and energy components.
In a hopeful sign for the jobs market, the Labor Department said
Thursday that initial claims for jobless benefits declined by
21,000 to 454,000 in the week ended July 3. Economists surveyed by
Dow Jones Newswires had expected claims would fall by 12,000. That
last time claims dropped by so much was in mid-April. However, the
previous week's level was revised upward, however, from 472,000 to
475,000.
The euro strengthened after European Central Bank president
Jean-Claude Trichet reiterated support for European bank stress
tests and said investors were too pessimistic on the euro-zone's
ability to deal with the sovereign debt crisis. However, Trichet
also said the region's economic recovery would likely be
uneven.
"Looking ahead, we expect the euro-area economy to grow at a
moderate and still uneven pace in an environment of high
uncertainty," Trichet said, speaking at a press conference in
Frankfurt following the ECB's decision to keep its benchmark rate
unchanged.
The remarks come amid growing fears that the region's
slow-motion economic upturn is losing steam. The International
Monetary Fund earlier Thursday warned that downside risks to the
global recovery "have risen sharply amid renewed financial
turbulence," alluding mainly to European governments' debt
problems. The euro was recently trading at $1.2690, up from $1.2642
late Wednesday in New York.
June chain-store sales were mixed, with some stores benefiting
from aggressive promotions and others hurt by consumers' continued
restrained spending. Abercrombie & Fitch (ANF) jumped 9.7%
after same-store sales rose 9%, above analysts' average estimate of
5.5% as the company benefited from aggressive promotions last
month. Limited Brands (LTD) gained 1.2% after its June same-store
sales rose 6%, nearly doubling expectations for a rise of 3.2%. And
warehouse retailer Costco Wholesale gained 2.1% after its June
same-store sales rose 4%, slightly below expectations for a rise of
4.2%.
However, teen retailers struggled, as Buckle (BKE) dropped 9.8%
after its June same-store sales slipped 7.3%, below estimates of a
0.1% gain. Wet Seal's June sales dropped 3.6%, below projections,
and the company said its sees second-quarter earnings below its
prior guidance, sending shares down 0.3%.
Among stocks in focus, American depositary shares of BP
(BP)gained 1.3% after setting a new target to seal the oil well.
The oil giant is BP pushing to fix its runaway Gulf oil well by
July 27, possibly weeks before the deadline the company is
discussing publicly, in a bid to show investors it has capped its
ballooning financial liabilities, the Wall Street Journal reported,
citing company officials.
In Asia, stocks rose, with the Australian market hitting a fresh
seven-day high after a stronger-than-expected June employment
report. That in turn lifted the Australian dollar and the euro.
Demand for safe-haven gold futures and Treasurys declined, with
the 10-year note down to push yield up to 3.04%. Crude-oil futures
rose above $75 a barrel.