By Jonathan Cheng
U.S. stocks edged up Thursday, extending a three-day rally,
after a better-than-expected jobs report and promising numbers from
some retailers.
The Dow Jones Industrial Average (DJI) rose 47 points, or 0.5%,
to 10,065. DuPont (DD) rose 2%, while McDonald's (MCD) gained 2.1%
and Boeing (BA) rose 1.6%. Technology components lagged, with Intel
(INTC) down 0.8% and Cisco Systems (CSCO) off 0.8%.
The Nasdaq Composite Index (RIXF) was flat at 2,159. The S&P
500 Index (SPX) rose 0.2% to 1,062.
Consumer staples strengthened, boosted by strong June sales at
warehouse retailer Costco Wholesale (COST). Costco shares gained
1.9% after the company's same-store sales rose 4%.
Retailers oriented to basic consumer needs also gained after the
reports showed the stores that did the best during June benefited
from aggressive promotions. Walgreen (WAG) rose 2.7%, while General
Mills (GIS) gained 1.8%.
Abercrombie & Fitch (ANF) jumped 7.1% after same-store sales
rose 9%, above analysts' average estimate of 5.5% as the company
benefited from promotions. Limited Brands (LTD) gained 0.9% after
its same-store sales rose 6%, nearly doubling expectations for a
rise of 3.2%.
"Frugality's still out there," said Christian Hviid, chief
market strategist at Genworth Financial Asset Management, noting
that weakness in the jobs market is likely still cutting into
spending. "It's a needs-versus-wants spending environment we're
back into."
In a more positive sign, the Labor Department said initial
claims for jobless benefits declined by 21,000 to 454,000 in the
week ended July 3, more than the 12,000 drop expected by
economists, though the previous week's level was revised upward, to
475,000 from 472,000.
"The numbers were slightly better than expected, but these are
volatile one-week numbers," said Sal Arnuk, co-head of equity
trading at Chatham, N.J.-based brokerage Themis Trading LLC. "We
still have millions of Americans out of work...I just don't see the
real economy getting meaningfully better yet."
Safe-haven assets declined as economic optimism strengthened.
The 10-year note (UST10Y) was recently down, pushing the yield up
to 3.02%, its first move above 3% since June 29. Yields move
inversely to prices. Crude-oil futures edged up above $75 a
barrel.
In other markets, the euro failed to garner any new direction
from comments made by European Central Bank President Jean-Claude
Trichet. The ECB kept its benchmark interest rate unchanged, as did
the Bank of England at its monthly meeting. The euro was recently
trading at $1.2668, up from $1.2642 late Wednesday in New York.
Among stocks to watch, Goldman Sachs Group (GS) fell 1.3% after
Meredith Whitney cut her second-quarter earnings estimates for the
company, according to StreetInsider.com.
Wells Fargo (WFC) fell 1.1% after saying it will shut down a
unit that makes what the San Francisco bank calls "non-prime" real
estate, auto and credit card loans and stop originating nonprime
mortgages, eliminating a total of 3,800 jobs, or 1.4% of its work
force.