U.S. stocks rose for a fifth day on Thursday as a larger than expected drop in U.S. jobless claims and an upbeat forecast from consumer goods maker Procter & Gamble added to enthusiasm that the economy is on track for a rebound.  Energy shares advanced, helped by rising forecasts for oil demand.  Nevertheless, given September’s weak track record, market participants have been bracing for a pullback.

On Thursday, the Dow Jones industrial average rose 80.26 points, or 0.8%, to 9,627.48, its highest close since October 6.  The broader S&P 500 index advanced 10.77 points, or 1%, to 1,044.14, its first five-day climb since November.  The Nasdaq composite index rose 23.63 points, or 1.2%, to 2,084.02.  With traders eschewing safe havens, yield on the benchmark 10-year Treasury note fell to 3.35%. The yield on the 30-year notes declined to 4.20%.

As the holiday-shortened week comes to an end today, investors would look toward extending gains into a sixth consecutive day, buoyed partly by strong reports from China.  This morning’s stock futures show shares opening with modest gains.  Dow Jones industrial average futures rose 9, or 0.1%, to 9,614.  Standard & Poor’s 500 index futures rose 1.60, or 0.2%, to 1,039.00, while Nasdaq 100 index futures rose 3.00, or 0.2%, to 1,685.75.

Treasury Secretary Geithner was more forthcoming in a speech before Congress Thursday, as he noted the strategy has shifted to preparing for future growth, adding the economy is back from the brink.  Geithner advised, “We must continue reinforcing the recovery until it is self-supporting and led by private demand.”
Thursday saw all ten S&P500 sectors moving higher, led by 2.2% gains in telecom shares, 1.7% in basic materials, 1.6% in oil and gas, 1.4% in tech, and 1.2% in consumer services.  On the New York Stock Exchange, volume picked up to 1.49 billion shares as advancing issues outpaced decliners by a 3-to-1 margin.

Among DJIA components, Procter & Gamble (NYSE:PG) shares jumped 4.2% after the company raised its 2010 profit outlook to $3.99 to $4.12.  Shares in Disney (NYSE:DIS) jumped 5.2% after the company reported strengthening ad markets, and hopes from improving consumer-spending trends.  Technology issues rose on increased estimates for top and bottom line results from Texas Instruments (NYSE:TXN) and ASML Holdings (NASDAQ:ASML); on the DJIA Cisco (NASDAQ:CSCO) shares advanced 3.5%. Cigna Corp (NYSE:CI) led healthcare issues higher even as President Obama’s speech appeared to have garnered support for his much-talked healthcare initiative.

News from China indicated a V-shaped recovery underway in that country as the National Statistics Bureau reported investments, industrial output and credit expanded in August, alleviating to some extent fears that the government was clamping down on credit growth. Chinese Premier Wen Jiabao noted, “China’s economic rebound is unstable, unbalanced and not yet solid,” adding, “We cannot and will not change the direction of our policy when conditions aren’t appropriate.”  The Shanghai Composite closed up 2.2% Friday, with the Hang Seng at its highest in over a year.

Zacks Investment Research