- The Washington Times - Thursday, August 21, 2003

NEW YORK (AP) — A trio of upbeat economic reports ranging from jobless claims to regional manufacturing cheered Wall Street yesterday, prompting investors to pick up shares on strengthening expectations of a solid recovery. The Nasdaq Composite Index reached another 16-month high.

“Jobless claims were benign, so people were relieved by that,” said Henry Herrmann, chief investment officer at Waddell & Reed Financial. “No one wants to see a bad claims or bad employment number. We didn’t get one, so that allowed people to focus on other good news.”

The Dow Jones Industrial Average closed up 26.17, or 0.3 percent, at 9,423.68, having declined 31 points Wednesday to snap a four-session winning streak.

The broader market also rose. The Nasdaq advanced 17.01, or 1 percent, to 1,777.55. The last time the tech-focused index closed higher was April 19, 2002, when it finished at 1,796.83.

The Standard & Poor’s 500 Index edged up 0.92, or 0.1 percent, to 1,003.27.

The Labor Department reported yesterday that 386,000 newly laid-off workers filed claims for jobless benefits last week, down 17,000 from the previous week. The number is the lowest level of new jobless claims in six months.

The Conference Board, meanwhile, said its Index of Leading Economic Indicators rose by 0.4 percent in July to 112.5, after a revised 0.3 percent increase in the previous month. It was the fourth straight month of gains, and the reading met analysts’ expectations.

And the Philadelphia Federal Reserve reported its business index in August jumped to 22.1, compared with 8.3 in the previous month. Analysts were expecting a much more modest reading of 10.

“The Philly Fed index reading was excellent because it showed new orders and shipments were up,” said Neil Massa, equity trader at John Hancock Funds. “For investors looking for a reason that the economy is turning around, that would be a big one.”

Stocks have lurched higher in recent weeks as investors remain upbeat about a speedy recovery. But some analysts caution that the market might be due for a retreat because the economic outlook remains somewhat murky.

“I’ve been surprised that no matter what — whether it’s the blackout, bombings overseas or a computer virus — nothing can keep this market down,” Mr. Massa said. “[Wednesdays] sell-off seemed to be a bit of a rest. Nothing indicated a change of [market] direction.”

But he noted that one potential cause for concern is that a gauge of investor anxiety, the Chicago Board Options Exchange’s volatility index (VIX), has been hovering around 20. Many believe a reading below 20 means the market is vulnerable to declines.

“My nervousness stems from the VIX, which shows some complacency. We have to continue to see economic numbers that point to a strong recovery” to sustain an upward trend, Mr. Massa said.

Monsanto climbed $1.43 to $24.12 after the developer of genetically engineered crops agreed to settle a lawsuit contending it dumped polychlorinated biphenyls, or PCBs, in Alabama. Merrill Lynch upgraded the company’s stock rating to “buy” from “neutral.”

Goodyear Tire & Rubber advanced 26 cents to $6.56 after it reached a tentative three-year contract with the United Steelworkers of America, reducing the threat of a strike.

Decliners included Krispy Kreme, which fell $1.42 to $47.50, even though the doughnut maker reported second-quarter profits that came in higher than estimates.

Pfizer dropped 95 cents to $29.79 after Smith Barney cut the drug maker’s stock rating to “in-line” from “outperform.”

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.

 

Click to Read More

Click to Hide