Jobs data bolsters Wall St's record streak

Wall Street advanced overnight, pushing the Dow Jones Industrial Average to another record, as jobless claims posted a surprise drop last week, offering the latest clue that the labour market is gathering strength along with the rest of the economy.

Initial claims for state unemployment benefits declined 10,000 to a seasonally adjusted 332,000, according to Labor Department data. Economists had expected claims to rise.

"The recent labour market data signal at least steady, and potentially improving, job growth so far in 2013 despite the implementation of various forms of fiscal tightening," Daniel Silver, an economist at JPMorgan in New York, told Reuters.

A separate Commerce Department report showed that the current account deficit unexpectedly dropped to US$110.4 billion in the fourth quarter, from an upwardly revised US$112.4 billion in the preceding three months.

In afternoon trading in New York, the Dow Jones Industrial Average added 0.47 per cent, the Standard & Poor's 500 Index climbed 0.42 per cent, while the Nasdaq Composite Index rose 0.35 per cent.

Earlier in the session the Dow touched 14,528.79, an intraday record high, while the S&P 500 is moving in on its closing record of 1,565.15 reached on October 9, 2007, climbing as high as 1,562.14 earlier in today's session.

"It's a little bit more fuel on the fire," Jeffrey Davis, chief investment officer at Lee Munder Capital Group, told Bloomberg News. "It's been a long time since you've seen momentum both on the market and technical front being supported by economic fundamentals. In spite of the fact the market's not as cheap as it once was, it's looking like the rally should continue."

In Europe, the Stoxx 600 Index finished the session with a 1.1 per cent gain from the previous close. Key national stock indexes also rallied in London, Paris, and Frankfurt, gaining 0.7 per cent, 0.9 per cent and 1.1 per cent respectively.

European leaders began a two-day summit today.

Tomorrow euro zone finance ministers will meet to discuss a financial rescue for Cyprus.

In a warning sign about sentiment, Spain sold 803 million euros of debt maturing in 2029, 2040 and 2041 at an unscheduled auction today. The tepid demand pushed up yields on 10-year bonds, last nine basis points higher at 4.85 per cent.

"I don't think it was a complete success," David Keeble, global head of fixed income strategy at Credit Agricole, told Reuters." It wasn't bad, it just demonstrates there is no great gun type of demand."

- BusinessDesk

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