US stocks up on labour market improvement

US stocks closed about 1 per cent higher yesterday, led by tech shares, after weekly jobless claims figures pointed to improving labour market conditions a day before the closely watched monthly payroll report.

The European Central Bank also lifted sentiment, putting the S&P 500 at another all-time closing high, as the ECB cut interest rates for the first time in 10 months and held out the possibility of further action if necessary to boost the Eurozone economy.

The move follows Wednesday’s Federal Reserve statement in which the Fed said it will continue its bond buying scheme to keep interest rates low and spur growth, and would step up purchases if needed.

“This shows that central banks are very determined to ensure that the system is stable and that the global economy continues to be propped up if needed,” said Weyman Gong, chief investment strategist at Signature in Norfolk, Virginia. “This makes us very comfortable with US markets for the rest of the year.”

Jobless claims fell sharply in the latest week, dropping to their lowest since the early days of the 2007-09 recession. The data follows a string of underwhelming reports, including a slow rate of growth in factory activity in the US and China, which added to concerns about the pace of growth going into the April jobs report. Analysts are looking for 145,000 jobs to have been added in the month, up from the 88,000 added in March.

The Dow Jones industrial average was up 130.63 points, or 0.89 per cent, at 14,831.58. The Standard & Poor’s 500 Index was up 14.87 points, or 0.94 per cent, at 1,597.57. The Nasdaq Composite Index was up 41.49 points, or 1.26 per cent, at 3,340.62.

The S&P ended at a record level and hit a record high intraday level of 1,598.58 earlier in the session.