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While you were sleeping Record dance goes on

Friday 12th April 2013

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Wall Street advanced, pushing the Dow Jones Industrial Average and the Standard & Poor's 500 Index to record highs, after a better than-expected report on US jobless claims. 

There was a sigh of relief after Labor Department data showed that initial jobless claims fell by 42,000 to 346,000 in the week ended April 6, from a revised 388,000 in the previous week. Economists surveyed by Bloomberg had predicted a decline to 360,000, while those polled by Reuters had forecast a drop to 365,000.

Today's data put to rest concern about the abysmal March payrolls report, released last Friday.

"We will see more job creation this month than we did in March and today's jobless claims numbers are consistent with that expectation," Robert Dye, chief economist at Comerica in Dallas, told Reuters.

"My sense is that the economy is generating on an average basis somewhere around 180,000 to 190,000 jobs a month," Dye added. "I do think that is enough to slowly bring the unemployment rate down and provide enough lift to households to help them feel some increase in disposable income."

In afternoon trading in New York, the Dow Jones Industrial Average rose 0.41 percent, the Standard & Poor's 500 Index climbed 0.34 percent, while the Nasdaq Composite Index advanced 0.07 percent. Both the Dow and the S&P 500 set fresh intraday trading highs earlier in the session.

Retailers including Ross Stores gained on solid sales data. Shares of Ross rose, last up 6.3 percent, after the company said sales at stores open at least one year rose 2 percent in March. Analysts had expected a decline of 1.3 percent, according to Bloomberg.

Tempering gains, however, were declines in technology stocks including Microsoft and Hewlett-Packard, down 5 percent and 6.6 percent respectively, following a report on a slump in personal computer sales in the first three months of this year as consumers opted for smart phones and tablets instead.

Microsoft shares also suffered from a downgrade. Goldman Sachs slapped a sell recommendation on the stock, down from a neutral rating.

In Europe, the Stoxx 600 Index gained 0.6 percent from the previous close.

Benchmark stock indexes in London, Frankfurt and Paris rose as well, closing with increases of 0.5 percent, 0.8 percent and 0.9 percent respectively.

After a meeting in London, the foreign ministers of the G8 said they failed to reach an agreement on how to proceed on Syria nor did they agree on what to do about continued nuclear war threats from North Korea.

BusinessDesk.co.nz

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