U.S. stocks rose on Thursday, with the advance gaining momentum throughout the session as financial shares rallied in response to a positive read on economic growth.
The Dow Jones Industrial Average
rose 88 points, or 0.4%, to 20,747. The S&P 500 index
added 9 points, or 0.4%, to 2,370. The Nasdaq Composite Index
climbed 18 points, or 0.3%, at 5,915. All three saw a lackluster start to trading, posting small moves on the day, but strengthened throughout the morning.
Earlier, the government said the U.S. economy, as measured by gross domestic product, expanded at a 2.1% annualized pace in the fourth quarter, slightly faster than the previously reported 1.9% rate. Separately, first-time jobless claims fell by 3,000 to 258,000 in the latest week, near their lowest level in decades.
“This is a market that looks like it may be gaining some traction as we go into the end of the month. The upward revision to GDP suggests economic momentum, and that’s providing some lift,” said Alan Gayle, director of asset allocation and senior investment strategist at RidgeWorth Investments.
The data helped support financial stocks, which are closely correlated to the pace of economic growth and were the biggest gainers in S&P 500 on the day, up 1%. Regional banks in particular enjoyed sharp moves higher, highlighted by a 2.4% gain for Zions Bancorp
while Regions Financial
was up 2.1%. The SPDR S&P Regional Banking ETF
With the day’s move, the S&P 500 moved into positive territory for March, up 0.3%. The Dow remains down 0.3% for the month.
Recent gains have been slight, and of the past seven sessions for the S&P 500, not including Thursday, only one has ended with a move greater than 0.2% in either direction. This rangebound trading may be a sign that recent upward momentum on Wall Street may be stalling, even as major indexes continue to trade near records.
Daily moves have flattened ever since a Republican health-care bill was pulled from the House floor on Friday after the White House and Republican leaders were unable to overcome resistance within their own party. The failure raised questions about the Trump administration’s ability to pass its economic agenda, which had been seen as market friendly.
“If Congress gets bogged down with its tax and spending plans, as it is often plagued to do, that could leave the market quite vulnerable,” Gayle said. “We need to see some tangible progress in the second quarter, otherwise confidence will erode.”
Fed speakers: Cleveland Fed President Loretta Mester forecast GDP growth above 2% in 2017, and sees a “sustained return” to 2% inflation “over the next year or so.” Mester also expects the Fed to raise interest rates again this year, but didn’t say how many times might be likely. Currently, market participants anticipate three or four hikes in total over 2017.
Airlines speed up recovery of lost luggage
Big airlines will soon allow travelers to electronically tell carriers where to deliver their lost luggage.
Stock movers: Cenovus Energy Inc.
fell 11% after ConocoPhillips
said it would sell the majority its Canadian oil-sands assets to the oil company. ConocoPhillips shares were up 9%.
Lululemon Athletica Inc.
shares fell more than 22%, with several analysts cutting price-targets on the retailer, which forecast lower profit and sales in the first quarter and missed fourth-quarter earnings expectations.
Other markets: European stocks
were tilting higher, with Germany’s DAX
on track for its highest close since April 2015. In Asia
equities saw broad losses, with the Nikkei 225 index
closing 0.8% lower.
extended its decline against the dollar, after a Reuters report that European Central Bank policy makers want to tamp down expectations for their policy announcement in April.