Stocks try for second-day rally
Initial jobless claims hit their lowest level since May. Department stores get a sales boost from the June heat. JPMorgan cuts estimate on Alcoa earnings.
Updated at 1:40 p.m. ET
Stocks were moving higher this afternoon as investors digested a better-than-expected report on initial jobless claims and a mixed bag of June retail sales.
First-time claims for unemployment benefits fell by 21,000 last week to 454,000, the Labor Department said this morning, the lowest level since early May and below economists' expectations for 460,000.
At 1:40 p.m. ET, the Dow Jones Industrial Average ($INDU) was up 64 points to 10,083 after surging 275 points on Wednesday. The Nasdaq ($COMPX) had added 4 points to 2,163, and the Standard & Poor's 500 ($INX) was up 4 points to 1,065.
The four-week moving average of initial claims, which smooths out weekly volatility, fell by 1,250 to 466,000. Continuing claims fell by 224,000 to 4.41 million in the week ended June 26, the lowest since November of last year and well below expectations for 4.6 million.
Crude oil was up $1.17 to $75.24 a barrel.
A hot June helps some retailers
Consumers were shopping in June as they tried to beat the early summer heat.
Department stores fared particularly well. Dillards (DDS) said June sales at stores open at least one year were up 2%, better than expectations for a 1% decline. Saks (SKS) saw sales rise 2.5%, topping estimates of 2%, and Nordstrom's (JWN) sales surged 14.1%, well above Wall Street's target of a 9.6% increase. Macy's (M) also had a good June. Its sales rose 6.5%, better than expectations for 6.1%.
Teen retailers were mixed, with Abercrombie's (ANF) sales jumping 9%, above the consensus estimate of a 2.8% gain, and Aeropostale's (ARO) sales rising 8%, topping expectations for 7.3%. But American Eagle (AEO) said sales fell 1%, which was worse than expectations for a 2% increase.
Costco Wholesale (COST) said June sales at stores open at least one year were up 4%, slightly below expectations for 4.2%. Excluding gas, Costco's same-store sales were up 1%, missing expectations for 3.6%. Target (TGT) also missed, with same-store sales up 1.7%, below expectations for 2.7%.
IMF boosts global growth forecast
The International Monetary Fund this morning increased its global growth forecast for 2010 to 4.6%, up from its April forecast of 4.2%, thanks to strong growth in Asia in the beginning of the year.
The IMF was cautious, noting that turbulence in financial markets "has cast a cloud over the outlook" and that "downside risks have risen sharply amid renewed financial turbulence." But the IMF said that "there is little evidence of negative spillovers to real activity at the global level."
Meanwhile, Treasury Secretary Tim Geithner had some reassuring comments for investors late Wednesday. Geithner told CNBC's "Kudlow Report" that the Obama administration hopes to keep the top tax rate on dividends and capital gains at 20%, saying that "we think that's good policy."
Geithner also said the economy is "healing" and the recovery looks "very encouraging" thus far.
Alcoa earnings estimate cut
Alcoa (AA), which kicks off second-quarter earnings season late Monday, got a bit of bad news from JPMorgan Chase after Wednesday's closing bell.
JPMorgan analyst Michael Gambardella lowered his second-quarter earnings estimate for Alcoa to 10 cents per share from a previous forecast of 15 cents. The consensus estimate is for 12 cents per share.
Shares of the aluminum giant were up a penny to $10.56.
Charley Blaine is out today.
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[BRIEFING.COM] The major averages ended modestly lower with the S&P 500 shedding 0.3%.
The benchmark average saw an opening loss of 1.2% after Japan's Nikkei tumbled 7.3%. Japanese stocks sold off amid continued volatility in Japanese Government Bond futures as the 10-yr yield spiked almost 16 basis points to 1.002 before the Bank of Japan's JPY2 trillion liquidity injection caused yields to retrace their gains.
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