Dow, S&P close at new records; payrolls in focus

NEW YORK Thu Jun 5, 2014 7:15pm EDT

Traders work on the floor of the New York Stock Exchange June 3, 2014. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange June 3, 2014.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - The Dow and the S&P 500 ended at a new record on Thursday after the European Central Bank cut rates to record lows and pledged to do more if needed to fight off the risk of deflation.

Investors are now focused on Friday's U.S. payrolls report for May. It is expected to show job growth slowed last month and the unemployment rate ticked up, but not by enough to upset the view that the economy is bouncing back.

The number of Americans filing new claims for unemployment benefits rose last week, but the underlying trend continued to point to a firming labor market.

"The number of data we got this week so far on the labor market have not provided a clear direction for tomorrow's numbers," said Randy Frederick, managing director of trading and derivatives with the Schwab Center for Financial Research in Austin.

"So I wouldn't be surprised if the market sold on the (payrolls) news tomorrow, but it's likely to just be a knee-jerk reaction."

The day's gains were broad, with all ten S&P 500 sectors ending higher. Industrials rose 1.1 percent and financials 0.9 percent. The day's weakest sector was telecom, considered a defensive group, which rose less than 0.1 percent.

The Dow Jones industrial average rose 98.58 points or 0.59 percent, to 16,836.11, the S&P 500 gained 12.58 points or 0.65 percent, to 1,940.46 and the Nasdaq Composite added 44.59 points or 1.05 percent, to 4,296.23.

With Thursday's advance, the S&P has risen in nine of the past 11 sessions, up 3.6 percent over that period, and ended at a record high five times in the past six sessions.

The ECB cut the deposit rate to -0.10 percent and launched a series of measures to pump money into the sluggish euro zone economy. It stopped short of full-fledged quantitative easing (QE) - printing money to buy assets - but ECB President Mario Draghi said more action would come if necessary.

Also supporting the day's gains, hedge fund manager David Tepper was reported by CNBC as saying the ECB partly "alleviated" his concerns about the market, after having said last month he was worried stock prices were stretched. Inc revived speculation about its next major product on Wednesday, using a mysterious YouTube video and website post to tease a June 18 "launch event" in Seattle to be hosted by CEO Jeff Bezos. The stock jumped 5.5 percent to $323.57.

Sprint has agreed to pay about $40 per share to buy T-Mobile US, marking further progress in the attempt to merge the third and fourth-biggest U.S. mobile network operators, a person familiar with the matter told Reuters on Wednesday. Sprint shares fell 4 percent to $9.02 while T-Mobile US dropped 2.3 percent to $33.49.

Rite Aid shares slid 7.4 percent to $7.87 after it estimated first-quarter profit much below expectations.

Ciena Corp shares jumped 18.4 percent to $22.48 after the company posted earnings that beat expectations and gave a revenue outlook above forecasts.

Trading volume was around 5.91 billion shares on U.S. exchanges, slightly above last month's average of 5.75 billion, according to data from BATS Global Markets.

(Reporting by Angela Moon; Editing by Nick Zieminski)

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Comments (3)
divinargant wrote:
Central authorities are doing a brilliant job of managing the melt up. It’s a shame that it is fake and not grown from organic means for then it would be legitimate.

Jun 05, 2014 11:58am EDT  --  Report as abuse
“European Central Bank cut rates to record lows,” that’s right folks, it’s record lows alright, as though it’s somehow a good for the average guy that for the first time rates were cut to an actual negative interest rate. Depositors are now paying banks for the privilege of putting money in banks. The stock market sees this as a positive sign because it’s herding savers into risk. Literally forcing depositors to put their savings into a rip off bank fund that will then legally totally confiscate the deposits after the next crash.

Jun 05, 2014 1:03pm EDT  --  Report as abuse
rikfre wrote:
Wall street rallies when sour pickles were served at lunch…Wall street falls when the Premier of China could not scratch his back…
Wall street rises when unemployment fell…rose…fell..rose..and some numbers were made up to indicate the depression is over….almost…oh..oh..the groundhog did not see its shadow….! There are no financial institutions on Wall street anymore..only apartments..and tourists….

Jun 05, 2014 3:00pm EDT  --  Report as abuse
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