US stocks rose Thursday, helped by an advance in banking and healthcare stocks and a report on jobless claims and regional manufacturing revived hopes that the worst of the economic crisis is over.Breaking a three-day losing run, the Dow Jones Industrial Average gained 58.42 points to 8555.60 and the S&P 500 index advanced 7.66 points to 918.37.Tech-heavy NASDAQ ended the day little changed.The S&P is now up 35.5% above its 12-year low hit on March 9.
Although financials have been a drag this week, Thursday saw the sector recording gains after a three-day losing streak and leading the list of gainers among the 10 S&P 500 industry groups with an advance of 2.5%.Discover Financial Services (NYSE:DFS) rose 4% after reporting a less-than-anticipated growth in bad loans.Lincoln National (NYSE:LNC) jumped almost 7% after it was upgraded by Credit Suisse (NYSE:CS).Bank of America (NYSE:BAC) surged 4.9% and JP Morgan (NYSE:JPM) added 4.4%.However, a WSJ report said there was a possibility that General Electric (NYSE:GE) may choose to spin off its financial unit rather than accept the burden of government oversight of its non-financial operations, sending its shares down 1.5%.However, volume remained light at 1.1 billion.
The Department of Labor’s report yesterday showed number of people collecting unemployment benefits after the initial week recorded its biggest decline since November 2001.New jobless claims, however, were up slightly as expected.
With massive treasury auctions due next week, Treasury prices declined, sending yields higher. The Treasury has announced plans to sell a record $165 billion debt next week, including $31 billion 13-week, $30 billion 26-week, $40 billion 2-year notes, $37 billion 5-years and $27 billion 7-years, to help fund stimulus spending. However, traders are increasingly getting worried that massive government spending could push food and energy prices higher, and eventually lead to inflation.As protection against a possible inflationary spiral and US dollar weakness, traders have bid up crude and other commodity prices, even as demand remains weak. Goldman Sachs (NYSE:GS), however, recently advised oil prices could hit $95/barrel by late 2010.Further pressuring the outlook for inflation, No one expects the supply train to dwindle soon.
Utilities gained 2.2% yesterday as investors sought higher-yielding investments.Healthcare stocks rose 2.2% as traders picked up defensive plays.Technology stocks declined after Needham & Co. downgraded SanDisk (NASDAQ:SNDK) to “underperform,” citing weakness in the NAND flash sector. SanDisk (NASDAQ:SNDK) shares plunged 6.1%, and Advanced Micro Devices (NYSE:AMD) fell 5.6%; Broadcom (NASDAQ:BRCM) was off 3.2%.After the market close, Research in Motion (NASDAQ:RIMM) reported better-than-expected results, but gave an outlook at the low end of Street targets.
Today being the end of the two day “quadruple witching” period, which marks the June expirations of stock futures and options with positions rolled into September contracts, trading is expected to remain volatile. CarMax (NYSE:KMX) is due to report quarterly earnings.
