Jobs & earnings reports boost US stocks
The US stock market continued its upward march on Thursday, as the fundamentals aligned to send benchmark indices to record highs. The S&P 500 and Dow Jones Industrial Average surged to fresh record highs following the release of upbeat US job figures and strong earnings reports from Morgan Stanley and UnitedHealth Group Inc.
The markets picked up momentum following a report from the US Department of Labor showing jobless claims declined more than expected last week. Initial jobless claims for the week ended July 12 dropped by 24,000 to 334,000, after the consensus called for a drop of only 13,000. Last month the markets rallied on the news that the US economy added 195,000 nonfarm payrolls in June, beating expectations by 30,000.
The biggest contributor to Thursday’s stock surge was a pair of earnings reports from Morgan Stanley and United Health Group, whose profits beat expectations. Quarterly profits at Morgan Stanley grew 42 percent, as stock-trading revenue surged, the latest sign that America’s second-largest investment bank is back on track. Morgan Stanley’s stock quote rallied more than 4.3 percent to close New York trade at $27.70 a share. Earlier in the week Citigroup profits also jumped 42 percent on the back of stock-trading revenue.
In a separate earnings report UnitedHealth Group’s second-quarter profits also beat expectations, sending share prices soaring. UnitedHealth’s stock advanced more than 6.5 percent to close the New York session at $70.55 a share.
Stock indices responded accordingly, extending their winning streaks. The US benchmark S&P 500 was up half a percent to close at 1,689.37. The Dow Jones was also up half a percent to end the day at 15,548.54.
Over the past 90 days the benchmark S&P has advanced more than 9 percent. More than 80 percent of the stocks in the index have traded above their average prices over the past 50 days, and 56 S&P stocks closed at 52-week highs yesterday.
The S&P rose yesterday following testimony from Federal Reserve Chairman Ben Bernanke, who said Fed stimulus was not on a preset course, and that economic recovery would determine the future of quantitative easing.
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