US stocks return to the highs of 2008
US stocks rose yesterday, moving back to 2008 highs, after a jump in bank shares and further upbeat data on the labour market, though sharp gains in oil prices limited the advance.
After losses on Wednesday, the rebound took the S&P 500 back above its 1,370 resistance level, which is seen as key to maintaining momentum in this five-month rally.
Bank shares ranked among the best performers on hopes that the European Central Bank’s second long-term liquidity injection would ease the region’s financial crisis. The S&P financial sector gained 1.2 per cent, led by a 2.9 per cent gain in JPMorgan Chase & Co to $40.37.
The ECB news “is going to be immediately positive for the banking system and for the credit markets in Europe, and in time, will be positive for the European economy. They are on the right road, which means that the risks associated with Europe are starting to abate. And that’s really good news”, said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.
An index of European shares rose 1.1 per cent.
Brent crude’s advance, which took futures above $128 a barrel to the highest since 2008 in post-settlement trading, revived concerns about the effect of higher oil prices on consumers and businesses.
Still, the Dow Jones Transportation Average ended up 1.1 per cent, suggesting investors were shrugging off the day’s rise in oil.
US jobless claims, which fell 2,000 to 351,000 in the latest week, were viewed as another sign the labour market may be on the mend. The news was partly offset by an Institute for Supply Management report showing the pace of growth in the US manufacturing sector unexpectedly slowed in February.
The Dow Jones industrial average was up 28.23 points, or 0.22 per cent, at 12,980.30. The Standard & Poor’s 500 Index was up 8.41 points, or 0.62 per cent, at 1,374.09. The Nasdaq Composite Index was up 22.08 points, or 0.74 per cent, at 2,988.97.
Automakers and retailers also were among the day’s best advancers.
US automakers reported healthy sales in the face of rising gas prices. Shares of Ford Motors rose 2.3 per cent to $12.66, while General Motors advanced 1.7 per cent to $26.47.
Mild weather helped many US chains post better-than-expected monthly sales in February. Gap jumped 7.2 per cent to $25.05. Buckle gained 6.9 per cent to $48.01.