US stocks see slight gain on good economic news
on 30/08/2013 08:21:17
The Dow Jones industrial average added 16.44 points, or 0.1%, to 14,840.95, while the Standard & Poor's 500 index rose 3.2 points, or 0.2%, to 1,638.17. The Nasdaq composite posted a bigger gain, rising 27 points, or 0.8%, to 3,620.30.
The Dow has gained 64 points over the past two days, not nearly enough to make up for its 170-point loss on Tuesday as tensions over Syria rattled markets.
Verizon Communications was the biggest gainer among the blue chips after Britain's Vodafone confirmed it was in talks with Verizon to sell its 45% stake their joint venture, Verizon Wireless.
Verizon rose 1.26, or 2.7%, to 47.82 dollars. The US-listed shares of Vodafone rose 2.39, or 8.1%, to 31.80.
While many fund managers said they were not looking to jump back into the market just yet, some individual companies are looking attractive again.
"If you're a long-term investor, it's an opportunity," said Richard Sichel, chief investment officer at Philadelphia Trust , which has 1.9 billion dollars under management. He noted a new investment, the retail chain PetSmart, as an example.
Wayne Wilbanks, chief investment officer at the asset management firm Wilbanks, Smith & Thomas, said the market might have fallen too quickly. He also warned that the gains from the last two days may not last.
"Be very careful," he said. "You haven't missed out on much if you've sat on the sidelines since May. I'm not putting a lot of money to work here."
The US economy grew at a 2.5% annual rate from April through June, much faster than previously estimated, the government said. Also, the Labour Department said the number of people who filed for unemployment benefits last week fell to 331,000, the fewest in five years.
While lower unemployment claims and an upward revision on GDP are both positive signs, most of Wall Street's attention is focused on next week, when the August jobs report will be released. The Federal Reserve is expected to decide the fate of its massive bond-buying programme in mid-September, and the jobs survey will be the last bit of significant economic data the Fed will have to consider before making its decision.
Traders also continue to watch Syria, where a US-led attack could happen, although such a strike seems less imminent than earlier in the week. Oil fell to below 109 dollars a barrel.
The price of crude oil fell 1.30, or 1.2%, to 108.80 dollars a barrel. Oil had climbed as high as 112 dollars earlier this week.
Energy-related stocks fell. Exxon Mobil slipped 2% and Chevron fell 1%.
Investors worry that a limited strike could drag the US and its allies into that nation's civil war, or worse, set off a regional conflict in an area where so much of the world's oil is located.
Beyond the news about Syria, it has been a mostly quiet week for stocks. Traders are winding down during the last week of summer and heading out for the Labour Day holiday this weekend.
Trading volume on the New York Stock Exchange was thin: 2.5 billion shares compared with a recent average of 3.4 billion shares.
In other corporate news, teen clothing store operator Guess jumped 3.51, or 13%, to 30.82 dollars after the company reported second-quarter profit and revenue late on Wednesday that blew past the expectations of Wall Street analysts. The retailer also raised its profit forecast for the year.
Campbell Soup fell 1.38, or 3%, to 43.33 after posting a loss for its fiscal fourth quarter. The company's results were dragged down by a charge related to the potential sale of a European business. While the results topped Wall Street's estimates, revenue missed expectations.