Wall Street gains on economy optimism
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E-mail Xinhua, April 13, 2012
U.S. stocks closed higher on Thursday, logging second consecutive gains as optimistic expectations on the U.S. and China's economic growth helped to stimulate investors' confidence.
The Dow Jones industrial average gained 181.19 points, or 1.41 percent, to 12,986.58. The Standard & Poor's 500 was up 18.86 points, or 1.38 percent, to 1,387.57. The Nasdaq Composite Index advanced 39.09 points, or 1.30 percent, to 3.055.55.
On the economic front, the U.S. Labor Department said initial jobless claims rose 13,000 to 380,000 last week, the highest level in two and a half months. The unexpected increase raised investors' concerns about the job market.
A separate report by the Labor Department showed that producer prices was unchanged in March as a drop in gasoline costs offset rising food prices.
Meanwhile, the Commerce Department reported that trade deficit narrowed unexpectedly by 12.4 percent to 46.0 billion dollars in February.
New York Federal Reserve Bank chief William Dudley said the U.S. economy isn't yet strong enough to make a significant dent in the unemployment rate. He said the economy still faces significant headwinds, notably the run-up in gasoline prices, the ongoing weakness of the housing sector, and fiscal drag at the federal and state levels.
The president of the New York Fed anticipated a 2.25 percent growth in the first quarter, which is weaker than the 3 percent increase in previous quarter.
However, JPMorgan, Goldman Sachs and Barclays raised their first-quarter economic growth estimates, stimulating investors' optimism on the U.S. economy and lifted the market on Thursday.
Among all the sectors, materials and energy sectors were the biggest winners, boosted by strong economic growth prospect.
Google surged more than 2 percent as the tech giant posted stronger-than-expected first quarter earnings reports. It gained 10.08 dollars per share, and revenue was 8.14 billion dollars during the period.
Meanwhile, Italy sold 2.89 billion euros of three-year bonds at a yield of 3.89 percent, up from 2.76 percent. The borrowing cost surged to 3-month high, reflecting investors' worries about the European debt problems.
Investors waited China's first quarter GDP results which will be released later on Thursday. Some traders anticipated the world' s second largest economy grew by 9 percent in the first quarter, better than previous estimates of 8.4 percent.
On other markets, oil ended nearly 1 percent higher on Thursday, lifted by strong China economic growth speculation. The dollar slipped while the euro rebounded. The gold price gained more than 1 percent to settle at nearly 1,700 dollars an ounce.
