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Stocks Rally To New Highs On Economic Data, More Bernanke

Stocks gained for the second consecutive day on Thursday as trading was invigorated by better-than-expected data about jobless claims and manufacturing, as well as a second day of congressional
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

Stocks gained for the second consecutive day on Thursday as trading was invigorated by better-than-expected data about jobless claims and manufacturing, as well as a second day of congressional testimony from Ben Bernanke during which the Fed chairman reiterated the central bank’s commitment to supporting the economy was interpreted as dovish by Wall Street.

The Department of Labor’s initial unemployment claims report was released early in the day, indicating that claims for the week fell to 334,000, a bit lower than the 345,000 that had been the forecast.

Meanwhile, the Philadelphia Federal Reserve’s manufacturing index jumped to its highest result since March of 2011 at 19.8, as the gauge of regional business conditions came in well ahead of June’s 12.5 reading, and more than doubled expectations of a reading of 8. More firms reported increases in business activity, hiring, and shipments than those that reported decreases.

The Standard & Poor’s 500 added 0.5 percent to end the day at a new all-time high of 1,689.37, while the Dow Jones Industrial Average also advanced 0.5 percent to close at its own new all-time high of 15,548.54 points, and the NASDAQ finished off at 3,611.28 points for a gain of 0.04 percent.

Along with the promising economic news, stocks were propelled by Bernanke’s continued testimony before the House Financial Services Committee, during which the Chairman gave reassurances that the “tapering” of the central bank’s asset purchases, while inevitable, would not necessarily translate into an immediate rise in interest rates.

A number of earnings reports also figured in to the day’s activity. Intel (INTC) and eBay (EBAY) both suffered significant losses after reporting disappointing earnings, while Morgan Stanley’s (MS) earnings report sent the stock up over 4 percent. International Business Machines (IBM) was up almost 2 percent after its own encouraging earnings report was released earlier in the day; the company forecasts more growth in its cloud computing segment that should offset an industry-wide slowdown in IT businesses.