Stocks gain for fifth day on unemployment report

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Gap (GPS) $35.87 +4.09%  FILE/ASSOCIATED PRESS
FILE/ASSOCIATED PRESS
Gap (GPS) $35.87 +4.09%

NEW YORK — The Dow
pushed further into record territory Thursday, having surpassed its previous all-time high two days ago. The catalyst was the latest evidence that hiring is picking up.
Stocks started up after the Labor Department reported that the number of Americans seeking unemployment aid fell by 7,000 last week, driving the four-week average to its lowest in five years.
The Dow Jones industrial average rose 33.25 points, or 0.2 percent, to 14,329.49. The Standard & Poor’s 500 gained 2.80 points, or 0.2 percent, to 1,544.26. Both indexes rose for the fifth day in a row.

The Dow barreled through a record high Tuesday and has added to its gains since then. The S&P 500 is also closing in on its own record high of 1,565, which was also reached Oct. 9, 2007, the same day of the Dow’s previous peak.

Investors have been buying stocks on optimism that employers are starting to hire again and that the housing market is recovering. The Dow is 9.4 percent higher this year and the broader S&P 500 is up 8.3 percent.

“If you have a multiyear time horizon, equities are an attractive asset, but don’t be surprised to see some volatility, especially after the big run we’ve had,” said Michael Sheldon, RDM Financial Group’s chief market strategist.
Financial stocks advanced amid speculation that banks will have amassed enough capital to be able to return more cash to shareholders.

Jeffery Saut, the chief investment strategist at Raymond James, predicted that any sell-off in stocks might be short-lived as investors who have missed out on the rally since the start of the year jump into the market.

“The rally is going to go higher than most people think,” Saut said. “This thing has caught most money managers flat-footed.”

The rally this year has been helped in no small part by continuing economic stimulus from the Federal Reserve.

The U.S. central bank began buying bonds in January 2009 and is still purchasing $85 billion each month in Treasury bonds and mortgage-backed securities. That has kept interest rates near historic lows, reducing borrowing costs and encouraging investors to move money out of conservative investments like bonds and into stocks.

• PetSmart fell $4.37, or 6.6 percent, to $62.18 after the company reported its fiscal fourth-quarter earnings. Profits for the pet store chain rose but its forecast for this year disappointed investors.

• Pier 1 Imports fell 96 cents to $22.28 after the home decor company issued an earnings forecast that was below Wall Street analysts’ estimates.

• Supermarket chain Kroger rose 89 cents, or 3 percent, to $30.25 after the company’s fourth quarter profit handily beat Wall Street expectations.

• Gap rose $1.41, or 4.1 percent, to $35.68 after the clothing retailer said a key revenue measure rose more than expected in February, helped by sales at its Gap and Old Navy stores. The company had been scheduled to release the sales figures after the market closed, but put them out after a transcript of its recorded sales call appeared on the Web site seekingalpha.com, halting the shares.


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