U.S. stocks rose, halting the longest slump this year for the Standard & Poor’s 500 Index, as an larger than forecast drop in jobless claims overshadowed slightly negative GDP data.
The S&P 500 rose 0.3% to 1,698.67 at 4 p.m. in New York, extending its third-quarter rally to 5.8%. The Dow Jones Industrial Average climbed 55.04 points, or 0.4%, to 15,328.30. About 5.3 billion shares changed hands on U.S. exchanges, 8.6% below the three-month average.
“Economic news have been reasonably good,” Mark Foster, chief investment officer who oversees $620 million at Kirr Marbach & Co. in Columbus, Indiana, said in a telephone interview for Bloomberg. “On the negative side, we have the short-term budget issues and debt ceiling. I don’t think that’ll end up being a major issue. People just get somewhat immune to all of that.”
Traders attributed the recent slide in stocks more to investors trimming their winning positions than to pessimism about the markets future direction.
“We hit all-time highs five days ago, so its logical that the market is going to take a pause here,” said Frank Ingarra, head trader at NorthCoast Asset Management. “[Less] stuff is totally undervalued in this market, but we think it can go higher from here,” he said.
In corporate news, EBay soared 4.5% to $56.64, its biggest rally since January. The owner of electronic-payments service PayPal said it will bolster that business by buying Braintree, a global payments platform that works with online and mobile-only startups such as room-rental service Airbnb and online restaurant-reservation company OpenTable Inc.
J.C. Penney Co. added 3% to $10.42, halting a six-day slide that peaked with a 15% plunge yesterday. The department-store chain repeated that it expects positive sales trends in the second half of the year, with some key items and sizes helping sales at stores and online. The shares have plunged 47% this year amid concern that it is running out of cash.
Hertz sank 16%, the most since May 2009, to $21.63. The rental-car company trimmed its forecast for full-year revenue and profit, citing weaker than anticipated car rentals at U.S. airports.
Eli Lilly fell 3% to $51.04. Lilly is relying on experimental drugs for Alzheimer’s, cancer and diabetes to boost growth as the company loses patent protection on some of its top products, including the antidepressant Cymbalta.
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