Dow makes it 8: Best win streak since April '07
Wall Street closes at fresh 2009 highs, with blue chip average managing longest winning streak in nearly 2-1/2 years.
NEW YORK (CNNMoney.com) -- Stocks rose Thursday, with the Dow extending its winning streak to eight straight sessions in a thinly-traded advance fueled by bank shares and Boeing.
Dell (DELL, Fortune 500) reported weaker sales and earnings that beat expectations, in a profit report that was released minutes before the close of trading, ahead of schedule. Shares gained 6.5% in extended-hours trading.
The Dow Jones industrial average (INDU) added 37 points, or 0.4%. The blue-chip average ended higher for the eighth session in a row, marking its longest winning streak since the period ended April 10, 2007.
Stocks ended Wednesday's session with the Dow, S&P 500 and Nasdaq at their highest levels since last fall. But investors found few reasons to extend the push Thursday, despite better-than-expected readings on housing and jobless claims. Nonetheless, the early weakness disappeared as the session ran on.
"There's a floor in this market and it's probably at least 5% below the recent highs," said Tyler Vernon, chief investment officer at Biltmore Capital. "There's still so much cash on the sidelines that when we see a selloff, there are retail investors and institutional investors ready to jump back in."
Stocks have essentially risen for the last five months, with the S&P 500 ending Wednesday's session up 52% from the 12-year low it hit on March 9. But the pace of the run, coupled with light August trading volume, has left markets churning over the last two weeks.
Better-than-expected economic news -- and a healthy infusion of monetary and fiscal stimulus -- drove the rally. But the latest batch of economic reports have had less of an impact on investor sentiment.
Reports are due Friday on July personal income and spending from the Commerce Department and August consumer sentiment from the University of Michigan.
GDP: Gross Domestic Product, the broadest measure of the health of the economy, declined at a 1.0% annual pace in the second quarter, unchanged from the initial reading last month. Economists thought GDP would be revised to show it slowed at a 1.5% annualized pace, according to Briefing.com estimates. In the first quarter, GDP declined at a 6.4% annualized rate.
Job market: The number of Americans filing new claims for unemployment last week dipped to 570,000 from a revised 580,000 the previous week. Economists surveyed by Briefing.com thought claims would fall to 565,000.
Oil: The price of oil turned higher, erasing morning lows. Oil hit 10-month highs earlier in the week. U.S. light crude oil for October delivery rose $1.06 to settle at $72.49 a barrel on the New York Mercantile Exchange.
Financials: On the upside, shares of AIG (AIG, Fortune 500) rallied 27% after the company's CEO told Reuters that he doesn't support a fire sale of the insurer's assets. New CEO Robert Benmosche said in a year, people will say the bailed-out insurer is performing well. The stock has jumped 274% in August alone.
Other financials rallying included Freddie Mac (FRE, Fortune 500), Fannie Mae (FNM, Fortune 500), Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) -- all of which have also received government help. The four have been responsible for much of the trading volume over the last few sessions.
Company news: Dow component Boeing (BA, Fortune 500) said it will have its long-in-the works 787 Dreamliner in the air by the end of the year and that it will make deliveries in the fourth quarter of 2010. The airplane manufacturer said it will take a non-cash charge of $2.5 billion, or $2.21 per share, in the third quarter.
Shares rallied 8.7%.
Toll Brothers (TOL) reported a quarterly loss of $2.93 per share, versus a loss of 18 cents a year ago. The luxury homebuilder was expected to report a loss of $1.79 per share, according to Briefing.com estimates. Toll Brothers also reported a drop in revenue that nonetheless managed to top estimates.
Problem banks: The number of financial institutions on the government's watch list surpassed 400 in the second quarter, the highest level in 15 years, the government said Thursday.
World markets: European markets tumbled in afternoon trading, while Asian markets mostly ended higher, with the Japanese Nikkei rising 1.4%.
Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.47% from 3.43% late Wednesday. Treasury prices and yields move in opposite directions.
Treasury sold $42 billion of 2-year notes Tuesday, $39 billion of five-year notes Wednesday. The sale of $28 billion of 7-year notes Thursday saw a weaker-than-expected demand, but it didn't seem to impact the bond market much.
Other markets: COMEX gold for December delivery rose $6 to settle at $951.80 an ounce.
In currency trading, the dollar rose versus the euro and fell versus the Japanese yen.
Market breadth was negative. On the New York Stock Exchange, losers beat winners eight to seven on volume of 1.16 billion shares. On the Nasdaq, decliners beat advancers by a narrow margin on volume of 2.16 billion shares.
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