Banks lead stock rally; Nasdaq nears 3,000
- Published on 03/01/2012 - 10:56 am
(AP) — Banks dodged a big hit from the Greek debt crisis and rallied Thursday to lead the stock market higher. Strong retail sales and more encouraging news about the U.S. job market also helped stocks rise.
The banks of the world are on the hook for as much as $70 billion in bond-insurance payments if Greece defaults on its debt. But a panel ruled that Greece's plan to restructure its debt should not trigger any insurance payments, at least not yet.
Bank stocks pushed higher in relief. Goldman Sachs jumped 5.2 percent, and Morgan Stanley gained 3.5 percent.
JPMorgan Chase and Bank of America were the top gainers in the Dow Jones industrial average. The Dow added 28 points to close at 12,980.30. That's a gain of 0.2 percent.
In the latest sign of improvement in the job market, the number of people seeking unemployment benefits fell last week to the lowest point since March 2008. The four-week average was also the lowest in four years.
Oil climbed $1.77 to $108.84 a barrel. The surging price of oil has weighed on investors' minds in recent weeks. Quincy Krosby, chief market strategist at Prudential Financial, said higher oil prices could eventually cause a sharp drop in the stock market. They could also give money managers an excuse to take some winnings off the table after the S&P 500 gained 9 percent over the past two months.
"We're going to have a pullback at some point, because money managers want to lock in their profits," she said. "The catalyst could be these escalating oil prices."
The drop in unemployment claims helped pushed Treasury yields up. The yield on the benchmark 10-year Treasury rose to 2.03 percent from 1.99 percent late Wednesday.
The S&P 500 index rose 8.41 points to 1,374.09, its highest closing level since June 5, 2008.
The Nasdaq composite index rose 22.08 points to 2,988.97. The Nasdaq briefly topped 3,000 for the first time in more than a decade Wednesday.
The government also reported that consumers earned a little more in January and spent most of it. The Commerce Department said consumer spending increased 0.2 percent in January. Americans' income rose 0.3 percent, the second straight monthly increase.
Costco Wholesale, Target Corp. and other retailers reported better than expected February sales, as more customers showed up to shop.
In other news out Thursday, Ford, Honda and other automakers reported strong sales for February. Ford Motor Co. rose 2.3 percent after reporting a 14 percent sales gain.
Among stocks making big moves:
— Gap soared 7.2 percent, the most in the S&P 500 index. The clothing retailer said a key sales figure rose 4 percent in February, helped by strong demand for spring clothing at its Banana Republic chain. Analysts had expected Gap's same-store sales to drop.
— Kroger gained 2.7 percent. The grocery store chain said its adjusted earnings beat analysts' expectations and it also raised its full-year earnings forecast.
— Sotheby's plunged 9.1 percent after the auction house reported earnings and revenues that were well below what Wall Street analysts were expecting.