YAHOO [BRIEFING.COM]: Strength
among financial stocks and a couple of positive pieces of data helped the
broader market overcome an early fit of weakness that stemmed from a
disappointing jobless claims report. In turn, stocks logged their third
straight session of gains and are now up modestly week-to-date.
News that initial jobless
claims for the week ending August 15 came in above expectations at 576,000 and
continuing claims made a slight advance to 6.24 million in the face of expiring
unemployment benefits undercut a positive bias in premarket trading. However,
stocks were able to shake off the news of stubbornly weak labor markets and
managed to make their way higher in the first few minutes of trade.
The initial advance was
particularly kind to the financial sector, which gained momentum as bank stocks
and insurers garnered additional support. Diversified banks finished 3.0%
higher and multiline insurers closed with a 4.3% gain. The broader financial sector
finished 2.6% higher, which was more than double the gain had by the next best
performing sector (industrials, +1.2%).
The mood among participants
improved further following midmorning news that leading economic indicators
increased 0.7% in July. Though that was generally in-line with expectations, it
marked the fourth straight increase.
A surprise increase in the
Philadelphia Fed Index also proved pleasing. The index for August came in at
4.2, which was up from -7.5 in July and bested the -0.2 that was widely
expected.
Gains by the financial sector,
along with an upbeat Philly Fed Index and leading indicators report, helped
drive all 10 major sectors to finish with gains.
The improved tone among
broader market participants even helped lift retailers, which were hampered by
weakness in shares of Sears Holdings (SHLD 65.00, -8.76) after the company
reported a worse-than-expected loss. Weakness was shared by Buckle (BKE 26.84, -1.09) and Limited (LTD 14.35, -0.23), even though both companies
posted better-than-expected quarterly earnings. Still, retailers were able to
finish 0.4% higher.
Trading volume remains low.
Though 1 billion shares exchanged hands in the NYSE for the first time since
Monday, that's still well below longer-term averages. The lack of participation
in recent sessions brings into question the legitimacy of the stock market's
three-session run, which now totals nearly 3%.DJ30 +70.89 NASDAQ +19.98 NQ100
+1.1% R2K +1.3% SP400 +1.1% SP500 +10.91 NASDAQ Adv/Vol/Dec 1733/1.98 bln/904
NYSE Adv/Vol/Dec 2221/1.05 bln/811