By Wallace Witkowski and Victor Reklaitis, MarketWatch
Shake Shack rallies after well-received earnings report
U.S. stocks pushed higher Thursday, overturning a string of
slight losses on the week, as they seek to break out of range-bound
action for the month.
The push comes even after weekly jobless claims and a headline
figure for inflation both unexpectedly declined.
The S&P 500 (SPX) was last up 21 points, or 1%, to 2,120,
for a weekly gain of 0.2%. Information technology and consumer
staples performed best among the benchmark's 10 sectors, which were
all in positive territory. The index is 0.3% off its all-time
high.
The Dow Jones Industrial Average (DJI) advanced 190 points, or
1.1%, to 18,251, just 0.2% off its all-time closing high of
18,288.63 set on March 2. The Nasdaq Composite (RIXF) gained 65
points, or 1.3%, to 5,046.
Over the past six months, a lack of conviction in the market,
mixed economic data, and the running debate over when the Federal
Reserve will start raising rates
(http://www.marketwatch.com/story/feds-rate-hike-choice-is-september-or-december-kohn-says-2015-05-14)
have kept investors trying to figure out just where stocks are
heading, said Brad McMillan, chief investment officer for
Commonwealth Financial.
"What we do find is that we're starting to bottom out at higher
levels and move up," McMillan said. "The factors that make us worry
are not as significant as we thought."
McMillan believes the market may see a real breakout in another
month if economic data, particularly retail sales, firm up.
It may be that investors have been a little distracted.
Investors have been fixated on a volatile bond market
(http://www.marketwatch.com/story/treasury-prices-rise-after-weak-data-as-eurozones-bonds-also-rebound-2015-05-13),
among other things.
"A breakout has been elusive for the SPX as investors have
focused beyond the equity market," said Katie Stockton, chief
technical strategist at BTIG, in a note Thursday.
Check out: Here's what happens to stocks once the bond rout ends
(http://www.marketwatch.com/story/why-dollar-bulls-should-take-the-plunge-now-2015-05-06)
"As earnings season winds down, we would note that support
levels remain intact for the major indices, and breakdowns were not
too numerous among individual stocks," Stockton added.
Thursday's gains come after U.S. stocks closed virtually
unchanged
(http://www.marketwatch.com/story/us-stocks-poised-to-break-two-day-losing-streak-2015-05-13)
on Wednesday, as early gains faded. The benchmarks had initially
traded higher, after disappointing U.S. retail sales may have
prompted investors to bet that the Fed would delay interest-rate
increases this year.
The weak retail report also sent the dollar (DXY) sharply lower
Wednesday--a slide it continued
(http://www.marketwatch.com/story/dollar-index-slides-to-lowest-since-january-2015-05-14)
on Thursday. Read: Weakening dollar may boost second-quarter
earnings
(http://www.marketwatch.com/story/strengthening-dollar-may-boost-second-quarter-earnings-2015-05-13)
Thursday's economic reports: The latest reading for initial
weekly jobless claims showed a dip by 1,000 to 264,000
(http://www.marketwatch.com/story/jobless-claims-dip-to-264000-remain-at-15-year-low-2015-05-14),
as the pace of layoffs remains around a 15-year low. Economists
polled by MarketWatch had expected claims to rise to a seasonally
adjusted 275,000.
U.S. producer prices fell
(http://www.marketwatch.com/story/producer-prices-drop-04-in-april-on-lower-energy-food-costs-2015-05-14)
a seasonally adjusted 0.4% in April. Economists polled by
MarketWatch had predicted no change.
There are no Federal Reserve speakers scheduled for Thursday,
but European Central Bank President Mario Draghi challenged an
argument
(http://www.marketwatch.com/story/draghi-hits-back-at-argument-qe-fuels-inequality-2015-05-14)
that easing efforts will hurt savers and fuel inequality at the
International Monetary Fund in Washington. Read: Fed's rate-hike
path, not timing, is what matters, says Schwab strategist
(http://www.marketwatch.com/story/schwab-strategist-says-hike-path-not-timing-is-what-to-focus-on-2015-05-13)
Individual movers: Shares in Shake Shack Inc.(SHAK) rose 4%
after the burger chain late Wednesday reported first-quarter
results that topped estimates from Wall Street analysts
(http://www.marketwatch.com/story/shake-shack-raises-revenue-outlook-after-loss-2015-05-13).
Kohl's Corp.(KSS) reported first-quarter sales below forecasts
(http://www.marketwatch.com/story/kohls-reports-weak-sales-growth-stock-falls-2015-05-14),
sending shares 12% lower for the biggest drop among S&P 500
stocks.
Cisco Systems Inc.(CSCO) was down 0.6%. Investors are digesting
the tech giant's quarterly report, which came out late Wednesday
and showed better-than-expected profit and revenue
(http://www.marketwatch.com/story/cisco-beats-quarterly-expectations-as-product-sales-grow-2015-05-13).
Read more in Thursday's Movers & Shakers column
(http://www.marketwatch.com/story/kohls-nordstrom-applied-materials-shares-in-focus-2015-05-14)
Other markets: European stock markets were higher after erasing
losses (http://www.marketwatch.com/storyno-meta-for-guid), while
Asian bourses
(http://www.marketwatch.com/story/australian-shares-fall-on-iron-ore-weakness-2015-05-13-231034025)
closed mixed. Gold futures (GCM5) gained
(http://www.marketwatch.com/story/gold-edges-higher-as-bulls-try-to-build-on-momentum-2015-05-14),
while crude oil (CLM5)
(http://www.marketwatch.com/storyno-meta-for-guid)moved lower
(http://www.marketwatch.com/story/oil-dips-after-iea-report-points-to-oversupply-2015-05-14).
--Sara Sjolin in London contributed to this article.
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