S&P 500 on Three-Day Hot Streak; Euro Zone Consumer Confidence Rose; U.S. Jobless Claims Fall
S&P 500 Has Best 3-Day Rally Since January (Bloomberg)
Stocks flew today, sending the S&P 500 to its biggest three-day rally since January, on better-than-estimated data and assurances on stimulus efforts from Federal Reserve officials. “The market was pessimistic and overreacted to the downside last week on Bernanke’s comments,” said Thomas Nyheim, a Wilmington, Delaware-based fund manager for Christiana Trust. “Federal Reserve board members are coming out and saying they won’t taper quantitative easing until the last few months of this year, if this year. The market is much more pleased with what it’s hearing and now it’s retracing its gains.”
Euro zone economic confidence jumped by more than expected this month — rising to its highest level in a little over a year — signaling that Europe could be finally emerging from its three years of slump brought about by its debt and economic crisis. “We are still cautious not to get carried away by the positive survey data flow out of the euro zone this month,” said Evelyn Herrmann, European economist at BNP Paribas.
Modest signs of improvement in the economy continue to show, as the number of Americans filing new claims for unemployment benefits fell slightly last week. Consumer spending increased by 0.3 percent last month, rebounding from a 0.3 percent drop in April. Further, according to the Labor Department, initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 346,000; economists polled by Reuters expected first-time applicants to fall to 345,000 last week.