U.S. Stocks Close Broadly Higher; Dow Scores Triple-digit Gain
NEW YORK (MarketWatch) -- U.S. stocks closed higher Thursday, with the Dow Jones Industrial Average's triple-digit gains propelled by the likes of General Motors Corp., which drew an analyst upgrade, and McDonald's Corp., which doubled its anticipated dividend.
"The blue chips are obviously in the spotlight again," said Peter Cardillo, chief market economist at Avalon Partners.
"It has to do with corporate news, less of a decline in weekly jobless claims and anticipation of a Fed rate cut. Once we get that rate cut, we'll probably retest the low end of the trading range."
Federal Reserve policymakers meet Sept. 18 on U.S. interest rates.
The Dow industrials closed up 133.2 points, or 1%, to 13,424.9, with 26 of its 30 components ending higher, led by GM , with shares of the automaker up 10% after Citigroup upgraded its rating to buy. .
The S&P 500 rose 12.39 points to 1,483.95, and the Nasdaq Composite gained 8.99 points to 2,601.06.
Pharmaceutical stocks continued their recent gains, with Merck & Co. drawing support after an upgrade by Banc of America to buy from neutral. The blue-chip stock climbed 0.4%. .
Shares of financial companies added to Wall Street's rally, aided by a Federal Reserve report illustrating a slowdown in the decline in the commercial paper market.
Investors were also cheered by data ahead of the opening bell. The Labor Department reported its count of Americans making initial applications for jobless benefits climbed 4,000 for the week ended Sept. 8, putting the total number of first-time claims at 319,000.
"Though claims moved up slightly, the level is still low and reflective of a healthy job market," said analysts at Action Economics. .
"The claims data does not support the view of a weakening labor market. Retail sales will show whether the reported weakness is affecting consumption," said Lehman Brothers economist Drew Matus of data coming Friday morning.
Trading light
Volume on the New York Stock Exchange topped 1.2 billion, and advancing stocks beat declining issues 10 to 7. At the Nasdaq, nearly 1.7 billion shares were traded, and advancers overtook declining stocks ran even.
Crude-oil futures marked their first-ever benchmark-contract close above $80 a barrel Thursday as a result of concerns over U.S. supplies that have been falling for weeks, but natural-gas prices dropped more than 6% as a storm threat to energy production in the Gulf of Mexico fizzled.
Crude for October delivery tacked on 18 cents to finish at $80.09 a barrel on the New York Mercantile Exchange. It touched an intraday high of $80.15 during the regular session and $80.20 during the electronic trading session -- both of which are all-time intraday highs for a front-month contract.
The recent spike in crude will spark an increase of 20 cents a gallon in the price of gasoline, according to an analyst with the American Automobile Association.
Lehman Brothers economist Zach Pandl struck a cautionary tone.
The rising price of crude "represents an important income shock to U.S. consumers and adds further downside risk to an already-dreary growth outlook," Pandl wrote in a Thursday note.
Stocks in motion
After shedding value for eight consecutive sessions, Countrywide Financial Corp. climbed 13.9% after the nation's largest mortgage lender said it had arranged for $12 billion in additional financing.
Shares of McDonald's climbed 6.1%. The fast-food giant late Wednesday raised by 50% its cash dividend for common shareholders. .
Microsoft Corp. saw more modest gains as the software goliath lifted its quarterly dividend by a penny, to 11 cents a share. Shares of Microsoft rose 0.2%.
Target Corp. gained 2.7% after the discount retailer said it had hired banking advisers to explore a possible sale of $7 billion in credit-card receivables.
Shares of AlcatelLucent were off 8.8%. The world's biggest telecommunications equipment maker slashed its sales and profit forecasts for the year.
Greenback gains
The dollar won back some ground against the euro after hitting all-time lows on Wednesday, and also rose against Japan's yen. The euro, which moved to a record high $1.3927 overnight before pulling back, more recently traded at $1.3882. .
In bonds, Treasury prices weakened. The benchmark 10-year note was off 18/32 at 102 5/32, yielding 4.478%.
Also on the Nymex, gold futures fell to tally a two-session loss of more than $3 an ounce, but the metal held its ground near $720, with gold for December delivery closing $2.80 lower to $717.90 an ounce. .
On Wednesday, Wall Street saw a mixed finish, with the Dow industrials down 16 points and the S&P 500 off 5 points. The Nasdaq Composite ended fractionally higher.
By Kate Gibson