Reports showing improvement in the employment picture and uncertainty about the situation in Syria kept stock prices in a narrow range on Thursday.
The Dow Jones industrial average gained 6.61 points to 14,937.48, the third consecutive gain. The Nasdaq Composite Index was up 9.74 points to
3,658.79 and the Standard & Poor’s 500 Index rose 2.00 points to 1,655.08.
The Department of Labor said initial claims for jobless benefits fell in the past week by 9,000 to 323,000, the lowest level in more than five years.
The department will release August employment data before the start of trading on Friday.
Gold declined $23.94 an ounce to $1,367.63. And oil was up $1.14 to$108.37 per barrel.
Louisiana-Pacific Corp. (NYSE: LPX) surged 11 percent after agreeing to buy Ainsworth Lumber Co.
Costco Wholesale Corp. (Nasdaq: COST) gained 2.8 percent as August sales beat estimates. Groupon Inc. (Nasdaq: GRPN) climbed 3.6 percent after Morgan Stanley upgraded the stock. Telephone and utility shares, the industries with the highest-dividend yields, fell as Treasury rates surged to a two-year high.
About 5.3 billion shares changes hands on U.S. exchanges, 12 percent below the three-month average.
Data indicated fewer Americans than forecast filed applications for unemployment benefits last week, while a separate report from the ADP Research Institute showed companies boosted payrolls in August by 176,000 workers.
The Labor Department’s monthly jobs report, which is due Friday, will probably show that U.S. payrolls rose by 180,000 in August; the jobless rate remained at 7.4 percent, a Bloomberg poll of economists showed.
The Institute for Supply Management’s nonmanufacturing index rose to 58.6 in August from 56 the prior month, a report from the Tempe, Ariz.-based group showed Thursday. The median forecast in a Bloomberg survey called for a drop to 55. A reading greater than 50 indicates expansion in the industries that make up almost 90 percent of the economy.
Central bank policymakers have been weighing data to determine whether the economy is strong enough for it to scale back the pace of bond buying. The Fed will probably decide to cut its $85 billion in monthly bond purchases this month, according to 65 percent of economists surveyed by Bloomberg on Aug. 9-13. The Federal Open Market Committee will hold a two-day gathering Sept. 17 and 18.
Monetary stimulus from central banks including the Fed has helped drive a global equity rally, with the S&P 500 and the MSCI All-Country World Index more than doubling from their lows in 2009.
The S&P 500 has slipped 3.2 percent from a record 1,709.67 on Aug. 2 amid concern over Fed tapering and as the U.S. moved closer to a military strike against Syria. The Senate Foreign Relations Committee voted yesterday to authorize President Barack Obama to conduct a limited military operation against the regime of Bashar al-Assad. The full Senate will begin to discuss the president’s plans when it reconvenes Monday.
Obama is meeting world leaders at the Group of 20 summit in St. Petersburg Thursday and today. The office of Russian President Vladimir Putin said there will be no separate session on Syria.
Louisiana-Pacific surged 11 percent to $16.95 after agreeing to buy Ainsworth Lumber for about 863 million USD in cash and stock. The Canadian company makes a substitute for plywood called oriented strand board.
Costco gained 2.8 percent to $114.62. The largest U.S. warehouse-club chain said August sales at U.S. stores open at least one year rose 5 percent, excluding fuel. Analysts estimated a 4.2 percent increase.
Groupon rallied 3.6 percent to $10.66. The daily deals site has turnaround potential in other markets after introducing deal banks in North America and showing strength in the mobile market, Morgan Stanley analysts wrote in a note. They raised the stock to “overweight,” an equivalent of “buy,” from “equalweight”.
Fastenal Co. (Nasdaq: FAST) jumped 6 percent to $48.60 for the biggest gain in the S&P 500. The construction supplies retailer said August daily sales rose 7.2 percent after a 2.9 percent gain in July on increased business from manufacturing customers.
Telephone and utility companies retreated at least 0.4 percent for the worst performance in the S&P 500 as rising bond yields reduced demand for equity income. The two groups offer a dividend yield of more than 4.2 percent, the most among 10 industries. That compared with the yield of 2.99 percent in 10-year Treasury bonds.
AT&T Inc. (NYSE: T), the largest U.S. phone company, declined 1.2 percent to $33.34.