Wall St up as fears of double-dip recede
US stocks rose on low volume yesterday as data showed improvement in housing and the job market a day ahead of the critical monthly payrolls figures.
Investors built on Wednesday’s sharp advance as indicators provided the latest reason for optimism the economy could avoid another downturn. But the nascent rally could be derailed if today’s jobs data disappoints investors.
Chipmaker shares rose for a second day running and the PHLX semiconductor index gained 2.1 per cent to close above its 14-day moving average for the first time since late July.
The Dow Jones industrial average added 50.63 points, or 0.49 per cent, to 10,320.10. The Standard & Poor’s 500 Index rose 9.81 points, or 0.91 per cent, to 1,090.10. The Nasdaq Composite Index gained 23.17 points, or 1.06 per cent, to close at 2,200.01.
About 6.6bn shares traded on the New York Stock Exchange, the Nasdaq and the American Stock Exchange, about average for the past month, but still way below last year’s daily average of 9.65bn. Volume is typically light in the days just ahead of the Labor Day holiday weekend.
The housing and labor markets have long been considered two of the biggest headwinds the economic recovery faces. Today’s payrolls report is expected to show about 100,000 jobs were lost in August.
Data from the National Association of Realtors showed pending home resales rose
unexpectedly in July and a separate report showed new claims for unemployment insurance fell for a second straight week.
The S&P 500’s moving average convergence-divergence or MACD generated a ‘buy’ signal after having been a ‘sell’ since 11 August. The last time the signal turned bullish was 9 July, foreshadowing an advance that ended a month later and made July the best month for the index in a year.
The Morgan Stanley Retail index rose 2.4 per cent and Nordstrom jumped 8.1 per cent to $32.76 as US retailers posted better-than-expected sales in August.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about seven to three, while on the Nasdaq, about eight stocks rose for every five that fell.