Banks dodged a big hit from the Greek debt crisis and rallied on Thursday to lead the stockmarket higher. Strong retail sales and more encouraging news about the US job market also helped stocks rise.
The banks of the world are on the hook for as much as $US70 billion ($A65.51 billion) in bond-insurance payments if Greece defaults on its debt. But a panel ruled that Greece’s plan to restructure its debt should not trigger any insurance payments, at least not yet.
Bank stocks pushed higher in relief. Goldman Sachs jumped 5.2 per cent, and Morgan Stanley gained 3.5 per cent.
JPMorgan Chase and Bank of America were the top gainers in the Dow Jones industrial average. The Dow added 28 points to close at 12,980.30. That’s a gain of 0.2 per cent.
In the latest sign of improvement in the job market, the number of people seeking unemployment benefits fell last week to the lowest point since March 2008. The four-week average was also the lowest in four years.
Oil climbed $1.77 to $108.84 a barrel. The surging price of oil has weighed on investors’ minds in recent weeks. Quincy Krosby, chief market strategist at Prudential Financial, said higher oil prices could eventually cause a sharp drop in the stock market. They could also give money managers an excuse to take some winnings off the table after the S&P 500 gained 9 per cent over the past two months.
“We’re going to have a pullback at some point, because money managers want to lock in their profits,” she said. “The catalyst could be these escalating oil prices.”
The drop in unemployment claims helped pushed Treasury yields up. The yield on the benchmark 10-year Treasury rose to 2.03 per cent from 1.99 per cent late on Wednesday.
The S&P 500 index rose 8.41 points to 1374.09, its highest closing level since June 5, 2008.
The Nasdaq composite index rose 22.08 points to 2988.97. The Nasdaq briefly topped 3000 for the first time in more than a decade on Wednesday.
The government also reported that consumers earned a little more in January and spent most of it. The Commerce Department said consumer spending increased 0.2 per cent in January. Americans’ income rose 0.3 per cent, the second straight monthly increase.
Costco Wholesale, Target Corp and other retailers reported better than expected February sales, as more customers showed up to shop.
In other news out on Thursday, Ford, Honda and other carmakers reported strong sales for February. Ford Motor Co rose 2.3 per cent after reporting a 14 per cent sales gain.
Among stocks making big moves:
– Gap soared 7.2 per cent, the most in the S&P 500 index. The clothing retailer said a key sales figure rose four per cent in February, helped by strong demand for spring clothing at its Banana Republic chain. Analysts had expected Gap’s same-store sales to drop.
– Kroger gained 2.7 per cent. The grocery store chain said its adjusted earnings beat analysts’ expectations and it also raised its full-year earnings forecast.
– Sotheby’s plunged 9.1 per cent after the auction house reported earnings and revenues that were well below what Wall Street analysts were expecting.
