Stocks surged on Thursday, continuing a two-day rebound as investors looked beyond a weak report on U.S. initial jobless claims and ongoing concerns in Europe.
The Dow Jones industrial average closed at 12,986.58, up 181.19 points or 1.4 per cent – marking the biggest one-day gain since mid-March. The broader S&P 500 closed at 1387.57, up 18.86 points or 1.4 per cent. In Canada, the S&P/TSX composite index closed at 12,214.65, up 187.89 points or 1.6 per cent.
The gains follow a jump in weekly U.S. initial jobless claims, to a two-month high of 380,000, disappointing expectations and contributing to more anxiety about the strength of the economic recovery. The report is the first since the U.S. Labor Department reported a disappointing payrolls report last Friday.
Spanish bond yields, which had been the subject of much consternation earlier in the week, retreated below 5.8 per cent but remained at elevated levels. Italian bond yields also declined modestly. European stocks rose, with Germany’s DAX index ending the day up 1 per cent.
Investors might be reacting to speculation that China will report better-than-expected economic growth, when it releases its first-quarter numbers on gross domestic product on Thursday night. Reports in the Wall Street Journal and Reuters said that traders were hearing that China’s economy grew 9 per cent last quarter, considerably better than the 8.4 per cent growth expected by economists.
As well, two Federal Reserve officials on Thursday reiterated a commitment to keeping the Fed’s key interest rate at ultra-low levels through 2014 – bolstering the view that the central bank will continue to stimulate the economy.
Among some of the big moves in the U.S., Bank of America Corp. rose 3.5 per cent, Hewlett-Packard Co. rose 7.2 per cent, Microsoft Corp. rose 2.1 per cent and Alcoa Inc. rose 2.7 per cent.
Google Inc. rose 2.4 per cent in regular trading hours before reporting strong quarterly results after markets closed. The company reported operating earnings of $10.08 (U.S.) a share, above expectations for earnings of $9.64.
In Canada, Manulife Financial Corp. rose 6.1 per cent and Royal Bank of Canada rose 0.9 per cent. Suncor Energy Inc. rose 2.8 per cent after the price of crude oil rose to $103.64 a barrel, up 94 cents. Barrick Gold Corp. rose 1.8 per cent after gold rose to $1,680.60 an ounce, up $20.30.