New York Report: S&P and Dow reverse losses despite DC row

THE S&P 500 and Dow Jones snapped five-day losing streaks last night on positive US job market data but gains were limited as investors worried if Washington DC politicians would pass bills to avoid a government shutdown and possible US debt default on time.

Initial claims for state unemployment benefits dropped last week near a six-year low, the Labor Department said, which could bode well for employers adding workers to their payrolls. Other data on housing and consumer prices were less positive signs of recovery.

But the encouraging jobless claims data comes shortly before September’s unemployment report, which will be important input for the Federal Reserve as it decides when to change monetary policy.

“If this was a good number, that means when we see the job report on 4 October, that number ought to be pretty strong,” said Phil Orlando of Federated Investors in New York.

“That’s going to give us another clue as to the underlying strength of the labor market, which was one of the reasons the Federal Reserve chose not to commence the taper.”

The Dow Jones industrial average was up 55.04 points, or 0.36 per cent, at 15,328.30. The S&P 500 Index was up 5.90 points, or 0.35 per cent, at 1,698.67. The Nasdaq Composite Index was up 26.33 points, or 0.70 per cent, at 3,787.43.

The Dow and S&P 500 rose after five straight sessions of losses, while the Nasdaq closed just shy of a high last seen about 13 years ago.

Shares of JC Penney gained 2.9 per cent, while pharma company Eli Lilly lost three per cent.