Stocks moved to record levels again Thursday in reaction to a big drop in jobless claims and positive sales reports from several retailers.
The Dow Jones Industrial Average gained 62.90 points to 14,865.14, a closing high. The Nasdaq Composite Index rose 2.91 points to 3,300.16 and the S&P 500 Stock Index also set a record high, up 5.64 points to 1,593.37.
The Dow would have been significantly higher had it not been for two components -- Microsoft and Hewlett-Packard -- dropping sharply after a survey showed a sharp decline in personal computer sales in the first quarter of 2013.
Helping the markets get off to a good start was a report from the Department of Labor showing initial claims for jobless benefits fell in the past week by 42,000 to 346,000.
Gold rebounded slightly from its recent selloff, gaining $6.10 to $1,564.90 an ounce. Oil fell $1.13 to $93.51 a barrel.
Ross Stores Inc. (Nasdaq: ROST) advanced 5.9 percent as March sales beat forecasts. Rite Aid Corp. (NYSE: RAD) reached its highest closing level in more than three years after the drugstore chain reported its first annual profit since 2007. Technology shares slumped as personal-computer shipments in the first quarter plunged the most since at least 1994 and Goldman Sachs Group Inc. (NYSE: GS) downgraded Microsoft Corp. (Nasdaq: MSFT) shares. Microsoft and Hewlett-Packard Co. (NYSE: HPQ) lost more than 4.4 percent.
“What’s going on right now is a positive confidence loop,” said Cameron Hinds, regional chief investment officer for Wells Fargo Private Bank, which has about $170 billion under management. “It’s almost like the market’s going up because of a self-fulfillment circle, and it’s almost like we need a new negative to keep the market from going up. And I don’t know what that is.”
The S&P 500 surged 1.2 percent Wednesday, the most since February, as China’s imports grew, Japan reiterated its stimulus plans and investors speculated earnings will beat estimates. The benchmark index has rallied 2.6 percent so far this week. It has more than doubled from its 12-year low in March 2009, helped by the Federal Reserve’s unprecedented bond purchases and three straight years of profit growth.
“The Federal Reserve and central banks around the globe are interested in boosting asset prices,” said Bill Nasgovitz, founder of Milwaukee-based Heartland Advisors Inc., which oversees $5.7 billion. It is possible “individuals and pension funds more or less throw in the towel and say, ‘Gee, we’ve got to increase our equity ownership.’”
JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC) are among companies scheduled to report earnings Friday. Analysts project profits at S&P 500 companies fell 1.8 percent in the latest quarter, the first year-over-year drop since 2009, estimates compiled by Bloomberg show.
L Brands Inc. (NYSE: LTD) added 4.3 percent to $50.25. The company, which changed its name from Limited Brands, said March same-store sales gained 3 percent, beating estimates of a 0.4 percent advance.
J.C. Penney Co. (NYSE: JCP) climbed 5.5 percent to $14.86. Activist investor William Ackman said Thursday that the company will reverse ousted-CEO Ron Johnson’s strategy of reducing discounts and put coupon advertising in newspapers again to try to boost sales. Johnson was replaced by Myron E. Ullman III on April 8.
Fortinet Inc. (Nasdaq: FTNT) plunged 13 percent to $18.99 after the provider of computer-network security reported preliminary first-quarter sales and profit that missed some analyst estimates. A weak economic environment in Latin America, Europe, Middle East and Africa, as well as inventory shortages contributed to the results, while demand was strong in Asia and among U.S. companies, CEO Ken Xie said.
Acadia Pharmaceuticals Inc. (Nasdaq: ACAD) surged 64 percent to $13.10, the highest in five years, after saying U.S. regulators will review its lead drug sooner than anticipated. The Food and Drug Administration agreed Acadia won’t have to conduct a final-phase trial for its drug to treat Parkinson’s disease psychosis, clearing the way for the biotechnology company to apply for an FDA review by the end of 2014.