US stocks rose yesterday as stronger-than-expected jobs and trade data helped lift optimism about the economic recovery, although sentiment was fragile as investors fretted over European banks.
Financials, hit hard in the August downturn, were among top gainers as new US claims for unemployment benefits fell to a two-month low, while the trade deficit narrowed sharply in July. JP Morgan Chase & Co rose 2.5 per cent to $40.10.
“The recovery is not falling apart and continued growth is the most likely outcome,” said Zach Pandl, economist at Nomura Securities International in New York. “This is generally a bond negative and positive for stock prices.”
However, defensive sectors such as healthcare, utilities and telecommunications services were also among top gainers in a sign investors remain cautious. The S&P healthcare index rose 1.2 per cent, with Pfizer up 1.3 per cent to $16.77.
Volume was light and trading volatile as some traders were off for the Jewish new year holiday in an already slow week shortened by Monday’s Labour Day holiday.
The Dow Jones industrial average gained 28.23 points, or 0.27 per cent, to 10,415.24. The Standard & Poor’s 500 Index rose 5.31 points, or 0.48 per cent, to 1,104.18. The Nasdaq Composite Index added 7.33 points, or 0.33 per cent, to 2,236.20.
Earlier, the S&P 500 touched a one-month high above 1,110 after data showed new claims for unemployment insurance fell to their lowest level in two months last week, while the US trade deficit narrowed sharply in July.
But some expressed skepticism over the data as a Labour Department official said some states had been unable to submit claims in time because of the Labour Day holiday, resulting in the department's making estimates for them.
Deutsche Bank shares came under pressure because it is considering a capital increase of up to €9bn ($11.43bn) to bolster its balance sheet as Basel capital requirements are finalised, two people familiar with the matter said.
Its shares fell 3.2 per cent to $59.99 in New York.