Financial, Retail Stocks Lure Bargain Hunters

Dow up 46 points

Investors shoved aside jitters about the economy to do a little bargain hunting.

Stocks rose Thursday after mostly falling for three days as traders scooped up beaten-down financial and technology stocks. The buying was subdued after a worse-than-expected weekly unemployment report added to concerns that the economic recovery might not come as quickly as hoped.

According to preliminary calculations, the Dow rose 46.43, or 0.6 percent, to 8,331.32. The S&P 500 index rose 9.15, or 1 percent, to 893.07, while the Nasdaq rose 25.02, or 1.5 percent, to 1,689.21.

The market is down sharply this week as investors worry that the optimism that fed a massive spring rally might have been premature.

The Dow Jones industrial average rose 46 points, but lagged gains by the Standard & Poor's 500 index and Nasdaq composite index. Financial stocks rose after falling earlier in the week and lifted the KBW Bank Index, which tracks 24 of the nation's largest banks, 3.7 percent.

Technology shares gained after software maker CA Inc. said Wednesday that its fiscal fourth-quarter earnings rose as cost-cutting stayed ahead of a drop in revenue.

The advance came as the market grappled with another reminder of the strained job market. The Labor Department's weekly data showed more workers filing for unemployment benefits. New claims jumped to 637,000, above what economists had forecast.

The overall number of people seeking unemployment benefits grew faster than expected, rising to 6.6 million, while continuing claims hit a 15th straight weekly record.

Analysts had expected some rebound after stocks tumbled Wednesday, sending the S&P 500 index down 2.7 percent. The market was shaken by a Commerce Department report that retail sales fell unexpectedly in April for the second straight month, and by a separate report that showed home foreclosures rising.

The twin hits to two key areas of the economy -- consumer spending and the housing market -- have led investors to drop stocks this week and seek the shelter of bonds. That put on hold a rally that has sent the Dow Jones industrial average spiking 31 percent off of 12-year lows reached in early March.

"Expectations got overblown and the harsh unfortunate reality is that unemployment continues to climb and that consumers remain under pressure," said Stuart Schweitzer, global markets strategist at J.P. Morgan's Private Bank.

Copyright AP - Associated Press
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