Industrials led the S&P 500 index higher and the Dow Jones Industrial Average moderately higher on Thursday, the result of solid economic data and some healthy corporate earnings reports.
All three major U.S. stock indexes closed out the trading day in positive territory heading into the three-day weekend.
For the holiday-shortened week, the S&P broke its three-week winning streak, while the Dow and the Nasdaq posted weekly gains. The bellwether S&P 500 has been within a percent of its all-time high for the last five sessions.
Retail sales in March exceeded consensus expectations, rising at their fastest monthly pace in 1-1/2 years, according to the Commerce Department.
In a separate report, data from the Labor Department indicated the number of Americans filing for unemployment benefits fell last week to a 50-year low.
Industrial shares aided the markets following upbeat quarterly results and remarks from China’s commerce ministry spokesman that progress has been made in U.S.-China trade talks.
With reporting season in full swing, January-March S&P 500 earnings are expected to have fallen 1.7 percent year-on-year, which would mark the first decline in quarterly earnings since 2016.
Of the 77 S&P 500 companies that have released results, 77.9 percent have exceeded consensus, compared with the 65 percent average rate going back to 1994.
Growing demand for aircraft parts drove Honeywell’s earnings upward. The company raised its full-year forecast, and its stock rose 3.8 percent.
Fewer catastrophe losses helped Travelers Companies Inc report higher-than-expected earnings. The property & casualty insurer’s shares gained 2.3 percent.
Union Pacific advanced 4.4 percent after exceeding earnings estimates as price hikes helped the railroad offset the impact of severe weather and Midwest floods.
Among earnings misses, Schlumberger reported a 20 percent decline in first-quarter earnings. Its shares closed out the trading day down 3.9 percent.
American Express saw its quarterly revenue fall short of consensus estimates, although the shares end the trading day up 1.7 percent.
Of the 11 major sectors in the S&P 500, seven closed in the black. Industrials were the largest percentage gainers, up 1.1 percent.
Online scrapbook company Pinterest rose 28.4 percent in its debut. Meanwhile, Lyft fell 1.9 percent. The company’s shares are now trading 19 percent below its $72 offer price.
U.S. stock markets will be closed on Good Friday.
Approximately 6.79 billion shares changed hands on the major domestic equity exchanges, in line with the average over the past 20 trading days.
Unemployment Claims Fall
The Labor Department reported on Thursday morning that the number of new applications for unemployment insurance declined to a 49-1/2-year low last week, to a seasonally adjusted 192,000 claims for the week ended April 13. It was the lowest level since September 1969 and is indicative of sustained strength in the economy.
Data for the prior week was revised to show 1,000 more applications received than previously reported. Claims have now declined for five straight weeks.
The Labor Department said no states were estimated last week. Claims tend to be volatile around this time of the year because of the different timings of the Easter holiday and spring breaks.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell by 6,000 claims to 201,250 claims last week, the lowest reading since November 1969.
The claims data covered the survey week for the nonfarm payrolls portion of April’s employment report. The four-week average of claims decreased by 19,250 claims between the March and April survey weeks. This suggests solid employment growth after payrolls increased by 196,000 jobs in March.
Though the trend in hiring has slowed, job gains remain above the roughly 100,000 needed per month to keep up with growth in the working-age population. The unemployment rate is at 3.8 percent, near the 3.7 percent Federal Reserve officials project it will be by the end of the year.
Thursday’s claims report showed the number of people receiving benefits after an initial week of aid declined 63,000 to 1.65 million for the week ended April 6. The four-week moving average of the so-called continuing claims dropped 22,750 to 1.71 million.
Retail Sales Up Sharply
Retail sales increased by the most in 1-1/2 years in March as households boosted purchases of motor vehicles and a range of other goods, the latest indication that economic growth picked up in the first quarter after a false start.
Rising the most since September 2017, retail sales saw gains in motor vehicles and gasoline stations, signaling consumers are giving the economy greater support.
According to the Commerce Department, the value of overall sales in March rose 1.6 percent after an unrevised 0.2 percent decrease the prior month.
The strong data may indicate that consumers will continue to drive the expansion amid solid wage gains, low unemployment, and policy makers indicating interest rates will remain on hold this year.
The rebound may also help offset an inventory overhang that’s poised to weigh on growth later this year.
Automobile dealer sales rose 3.1 percent, the most in 18 months, after a drop the prior month. Industry data from Ward’s Automotive Group previously showed unit sales rebounded in March.
Twelve of 13 major retail categories increased. Sales at clothing stores increased 2 percent, the most since May, while food services posted a 0.8 percent gain, the best since July. Non-store retailers held up with a second-straight 1.2 percent rise, as sporting goods and hobby stores saw the lone decline.
Sales in the “control group” subset, which some analysts view as a cleaner gauge of underlying consumer demand, climbed 1 percent and topped projections. The measure excludes food services, car dealers, building-materials stores and gasoline stations.
Sales at filling-stations increased 3.5 percent, in line with the prior month, the report showed, as oil prices rallied.
Excluding automobiles and gasoline, retail sales rebounded with a 0.9 percent rise after a drop the previous month.
January retail sales were revised up to a 0.8 percent gain from a 0.7 percent rise.
The retail-sales data capture just under half of all household purchases and tend to be volatile. March personal-spending figures, which detail consumer purchases, will offer a fuller picture of consumer spending at the end of the month.