Stocks closed higher Thursday as investors weighed improved reading on the jobs front against slightly disappointing construction spending and manufacturing data. According to the Labor Department, the number of Americans filing first-time claims for unemployment benefits dropped 2,000 to 351,000 last week, the lowest since March 2008. Four-week average now stands lower by 5,500 at 354,000, statistics showed.
Separately, however, government report showed construction spending dropped 0.1 percent in January, the first monthly drop July. Another report showed incomes rose 0.3 percent while spending climbed 0.2 percent in January, both falling short of expectations.
The markets pared some of the early gains after U.S. manufacturing data came in weaker than expected. The Institute for Supply Management reading showed manufacturing activities slowing in Feb. The ISM manufacturing index fell 1.57 points to 52.4 in February though consensus estimates had put it at 54.7. Fortunately, any reading above 50 reflects overall expansion.
The Dow Jones Industrial Average (DJIA) added 0.2 percent, to close at 12,980.30 for the day, while the S&P 500 (SPX) 0.6 percent, to end at 1374.09. It has climbed 9.3 percent so far this year, with financial companies leading today’s charge following an earlier rally in European banks. The tech-laden NASDAQ Composite Index (COMP) gained 0.7 percent, to close at 2,988.97.
Yield on 10-year notes rose six bps to 2.03 percent today, its highest level in a week. Corporate bonds topped treasuries overall economic data remains positive. U.S. 30-year bond yields climbed six basis points to end at 3.15 percent, the highest level since Feb. 22.
The Vanguard Total Bond Market ETF (BND) lost 0.39 percent over yesterday, while iShares Barclays 20 Year Treasury Bond ETF (TLT) shed 1.16 percent, on the day.
The iShares MSCI Italy Index Fund (EWI) emerged today’s top gainer and added 3.6 percent on the day after the European Central Bank announced LTRO worth €529.5 billion to the region’s bank Wednesday. The Italy ETF is heading towards its Feb. highs and closing in on its long-term trend line.
The Market Vectors Vietnam ETF (VNM) reversed two consecutive days of fall and ended 3.3 percent higher. Also miners witnessed a reversal of trend and after Wednesday’s steep sell-off, SPDR S&P Metals & Mining ETF (XME) clocked a 2.0 percent jump on the day.
Precious metals funds that got hammered yesterday are back in green today. The iShares Silver Trust (SLV) and iShares Gold Trust (IAU) ended the day higher.
Among the day’s losers, there seems no respite for natural gas funds. United States Natural Gas Fund (UNG) is down 4.5 percent. The iPath Dow Jones UBS Natural Gas Subindex Total Return ETN (GAZ) is marching south as well on increased selling pressures.
Our Trend Tracking Indexes (TTIs) picked up speed again and moved higher after yesterday’s minor retreat.
Disclosure: Holdings in BND, GLD
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