Banks lead stock rally; Nasdaq nears 3,000

MATTHEW CRAFT

AP Busi­ness Writer

NEW YORK — Banks dodged a big hit from the Greek debt cri­sis and ral­lied Thurs­day to lead the stock mar­ket higher. Strong retail sales and more encour­ag­ing news about the U.S. job mar­ket also helped stocks rise.

The banks of the world are on the hook for as much as $70 bil­lion in bond-insurance pay­ments if Greece defaults on its debt. But a panel ruled that Greece’s plan to restruc­ture its debt should not trig­ger any insur­ance pay­ments, at least not yet.

Bank stocks pushed higher in relief. Gold­man Sachs jumped 5.2 per­cent, and Mor­gan Stan­ley gained 3.5 percent.

JPMor­gan Chase and Bank of Amer­ica were the top gain­ers in the Dow Jones indus­trial aver­age. The Dow added 28 points to close at 12,980.30. That’s a gain of 0.2 percent.

In the lat­est sign of improve­ment in the job mar­ket, the num­ber of peo­ple seek­ing unem­ploy­ment ben­e­fits fell last week to the low­est point since March 2008. The four-week aver­age was also the low­est in four years.

Oil climbed $1.77 to $108.84 a bar­rel. The surg­ing price of oil has weighed on investors’ minds in recent weeks. Quincy Krosby, chief mar­ket strate­gist at Pru­den­tial Finan­cial, said higher oil prices could even­tu­ally cause a sharp drop in the stock mar­ket. They could also give money man­agers an excuse to take some win­nings off the table after the S&P 500 gained 9 per­cent over the past two months.

“We’re going to have a pull­back at some point, because money man­agers want to lock in their prof­its,” she said. “The cat­a­lyst could be these esca­lat­ing oil prices.”

The drop in unem­ploy­ment claims helped pushed Trea­sury yields up. The yield on the bench­mark 10-year Trea­sury rose to 2.03 per­cent from 1.99 per­cent late Wednesday.

The S&P 500 index rose 8.41 points to 1,374.09, its high­est clos­ing level since June 5, 2008.

The Nas­daq com­pos­ite index rose 22.08 points to 2,988.97. The Nas­daq briefly topped 3,000 for the first time in more than a decade Wednesday.

The gov­ern­ment also reported that con­sumers earned a lit­tle more in Jan­u­ary and spent most of it. The Com­merce Depart­ment said con­sumer spend­ing increased 0.2 per­cent in Jan­u­ary. Amer­i­cans’ income rose 0.3 per­cent, the sec­ond straight monthly increase.

Costco Whole­sale, Tar­get Corp. and other retail­ers reported bet­ter than expected Feb­ru­ary sales, as more cus­tomers showed up to shop.

In other news out Thurs­day, Ford, Honda and other automak­ers reported strong sales for Feb­ru­ary. Ford Motor Co. rose 2.3 per­cent after report­ing a 14 per­cent sales gain.

Among stocks mak­ing big moves:

— Gap soared 7.2 per­cent, the most in the S&P 500 index. The cloth­ing retailer said a key sales fig­ure rose 4 per­cent in Feb­ru­ary, helped by strong demand for spring cloth­ing at its Banana Repub­lic chain. Ana­lysts had expected Gap’s same-store sales to drop.

— Kroger gained 2.7 per­cent. The gro­cery store chain said its adjusted earn­ings beat ana­lysts’ expec­ta­tions and it also raised its full-year earn­ings forecast.

— Sotheby’s plunged 9.1 per­cent after the auc­tion house reported earn­ings and rev­enues that were well below what Wall Street ana­lysts were expecting.

Posted by AP News on Mar 1 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.