Dow shakes off 6-day losing streak, climbs on positive data
18 minutes ago
Stocks rose strongly on Thursday, lifted by some
encouraging manufacturing data out of the U.S., China and euro zone.
But uncertainty persists as to when the Federal Reserve may begin to
reduce its monthly bond purchases.
The Dow Jones Industrial Average posted a solid gain, its first in seven sessions, and was 66 points higher in early afternoon trading, led by Microsoft and Alcoa. Hewlett-Packard
was a drag, down sharply after its earnings report on Wednesday.
Despite today's fall, HPQ is still the best Dow stock this year, with a
gain of 55 percent
The S& P 500 and the Nasdaq were surging after recent weakness. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 16.
Among S& P sectors, energy and financials were higher while telecoms weakened.
The
latest jobless claims report showed a rise in initial claims to
336,000, a bit higher than the 330,000 economists were looking for. July leading indicators rose 0.6 percent, a bit better than the 0.5 percent increase expected.
Meanwhile, financial data firm Markit said its " flash" U.S.
manufacturing purchasing managers index rose to 53.9, its best showing
since March.
" I do think the economy is in better shape than
most people think, and that's why i think this setback over the last few
days is a buying opportunity," Jim McCaughan of Principal Global
Investors said.
In global economic data, HSBC's preliminary
reading of Chinese PMI for August crossed the key 50-level for the
first time in four months thanks to a rebound in new orders. The data
was the latest sign of stabilization in China, and boosted sentiment
after July's reading of 47.1, which marked an eleven-month low.
" China's manufacturing growth has started to stabilize on the back of
modest improvements in new business and output. This is mainly driven
by the initial filtering through of recent fine-tuning measures and
companies' restocking activities," said Qu Hongbin, the co-head of
Asian economic research at HSBC.
European markets closed
higher after Germany's PMI for August climbed to 53.4, up from 52.1 in
July. Broader euro zone PMI data also beat expectations.
" They're certainly good numbers, and we've been seeing this for the
last four or five months in Europe," Richard Jerram, chief economist at
the Bank of Singapore, told CNBC. " It does seem that as the headwinds
from fiscal tightening fade, then the economies are starting to lift."
(Read more: Euro zone flash PMI at highest level since June 2011)
There remains uncertainty as to when the Fed will start slowing its massive stimulus program, however. Minutes from the central bank's last policy meeting,
released on Wednesday, showed the Fed is preparing to start tapering,
but provided little indication as to when it might do so.
UBS
economist Maury Harris told CNBC, " The Fed is just apparently unable
to send any kind of consistent message about what they're up to."
Harris expects tapering to start in the fourth quarter, but it could be
a " tiny taper" and " hardly enough to make any kind of difference."
The annual Fed symposium was starting in Jackson Hole, Wyoming, on
Thursday evening. Fed Chairman Ben Bernanke broke with tradition and
will not attend this year,and there will be plenty of speculation at
the meeting as to who will replace him in January.
Source: http://www.nbcnews.com/business/dow-shakes-6-day-losing-streak-climbs-positive-data-6C10975694
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