US Stocks advanced to snap a three day losing streak buoyed by encouraging jobs data and bond market stability with the Dow Jones Industrial Average trading close to its record high.
The US labor department reported that initial claims for state jobless benefits declined by 1000 to a seasonally adjusted 264,000 last week while the monthly unemployment average remained at a 15 year low.
Also aiding the rally was a return to stability on the benchmark 10 year US Treasury bond after its two day selloff where it advanced to above 2.28- its highest close in five months.
Market analysts expect the decline in yields to be short-lived with yields expected to remain high for some time.
According to the Wall Street Journal Dollar Index, the greenback also lost ground to a basket of major foreign currencies sinking to its lowest in more than four months.
A weaker dollar offers respite for multinationals with operations overseas as it helps boost profits.
“The dollar’s getting a little bit weaker and the bond market is actually rallying a bit as opposed to what’s been happening for the most of the past few weeks,” Mark Kepner, an equity trader at Themis Trading LLC, in Chatham, New Jersey, told Bloomberg.
“The jobless claims numbers were also good, and continue to show the job market is getting better, while PPI numbers didn’t show any worries about inflation.
The S&P 500 Index advanced was most recently up by 17.65 points or 0.8% at 2110 to slash its weekly decline to only about 0.3%. Nine of its ten key sectors extended gains for the day led by IT and Utilities while consumer discretionary was the only losing sector.
The Dow Jones Industrial average most recently tacked up 178 points or 0.84% at 18,217.68 points. The blue chip index is now just 50 points shy of its record close and is even for the week.
The technology heavy Nasdaq Composite added 26 points or 0.5% at 5008 points to build on yesterday’s gains and turn flat for the week.
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