Dow Gains For Third Straight Session
NEW YORK (TheStreet) -- Stocks finished with respectable gains on Thursday as data showing progress in the housing market offset a handful of high-profile earnings misses and another disappointing read on weekly initial jobless claims.
The Dow Jones Industrial Average jumped 114 points, or 0.9%, to close at 13,205. The S&P 500 gained 9 points, or 0.7%, to settle at 1400. Both the Dow and the S&P 500 have now risen in three straight sessions.
The Nasdaq , which jumped more than 2% on Wednesday, added 21 points, or 0.7%, to finish at 3051.
Breadth within the Dow was positive with 24 of the index's 30 components finishing the day higher, led by Wal-Mart
In the broad market, winners narrowly outpaced losers by a 2-to-1 ratio on the New York Stock Exchange and 1.5-to-1 on the Nasdaq. The VIX, which measures market volatility through options activity in the S&P 500, was more than 3% lower at 16.24, backing away from the 20- level that is indicative of heightening market fear.
Stocks finished higher Wednesday with the Nasdaq outperforming the broad market, soaring 2.3%, because of a massive post-earnings rally in Apple
Adding the positive sentiment on Thursday, the National Association of Realtors said its index of pending home sales increased 4.1% in March to 101.4, the highest level since April 2010 and better than expected. In addition, the index was revised to an increase of 0.4% in February from a previous reading of a 0.5% dip.
Warm weather and low interest rates helped boost the number of Americans signing contracts to buy previously owned homes, with the index showing a spike of 8.7% in the West and a 5.9% gain in the South. Economists on average expected levels to increase by 1%.
"Based on this report, our expectations is for the recent weakness in existing home sales to end, with a modest up-tick in existing sales activity expected in April," says Millan Mulraine, senior U.S. strategist, TD Securities.
Before the open, the Labor Department reported that initial claims for the week ending Apr. 21 fell by 1,000 to a seasonally adjusted 388,000 from the previous week's upwardly-revised figure of 389,000. The consensus was looking for initial claims to decline to 375,000 last week from the originally-reported 386,000 the prior week.
The four-week moving average now stands at 381,750, an increase of 6,250 from the previous week's upwardly-revised average of 375,500. Continuing claims rose 3,000 to 3.315 million in the week ended April 14.
"The pace of jobless claims remained very elevated, with the number of jobless filings declining only marginally," said Mulraine.
In corporate news, Exxon reported first-quarter profit of $9.5 billion, or $2 a share, down from $10.65 billion, or $2.14 a share last year, and short of Wall Street's estimate for a profit of $2.09 a share. The stock close down 1%.
Brian Peery, portfolio manager, Hennessy Funds, says Exxon remains attractively priced, especially after announcing a quarterly dividend boost of 21% on Wednesday.
"If you take a long-term approach to things, Exxon's still trading at a really reasonable P/E and a yield of about 3%," he says. "So if I'm looking at this long term: Am I looking at a 2% ten-year treasury or am I looking at a 3% yield on Exxon, which has better tax treatment."
The beverage and snacks maker earned $1.13 billion, or 71 cents a share, down slightly from year-earlier earnings of $1.14 billion, or 71 cents, while core earnings were 69 cents a share; analysts were expecting 67 cents. Shares were lower by 0.4%.
Shares of Akamai Technologies
In commodity markets, the June crude oil contract rose 43 cents to settle at $104.55 a barrel. The June gold contract gained $18.80 to settle at $1,660.50 an ounce.
The benchmark 10-year Treasury was last gaining 10/32, diluting the yield to 1.95%. The greenback was trading lower against a basket of currencies, with the dollar index down 0.1%.
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In Europe, London's FTSE and Germany's DAX closed higher by 0.5% each. Hong Kong's Hang Seng rose 0.8% and Japan's Nikkei Average finished flat.
-- Written by Andrea Tse and Shanthi Bharatwaj in New York.
>To contact the writer of this article, click here: Andrea Tse.