U.S. stocks rose, with benchmark indexes poised for the longest rally since July, as investors weighed data on the labor market and American services industry before tomorrow’s monthly jobs report.
Louisiana-Pacific Corp. surged 11% after agreeing to buy Ainsworth Lumber Co. Costco Wholesale Corp. gained 2.6% as August sales beat estimates. Groupon Inc. climbed 3.9% after Morgan Stanley upgraded the stock. Telephone and utility shares, the industries with the highest dividend yields, fell as Treasury rates surged to a two-year high.
The Standard & Poor’s 500 Index rose 0.3% to 1,657.18 at 2:59 p.m. in New York. The Dow Jones Industrial Average added 23.39 points, or 0.2%, to 14,954.26. Trading in S&P 500 stocks was 6.4% below the 30-day average at this time of day.
“Most people are looking at Friday’s jobs number as the determining factor whether or not the Fed will start tapering in September,” Steven Bulko, the New York-based chief investment officer of Lombard Odier’s $1.2 billion long/short 1798 Fundamental Strategies Fund, said by telephone. “We are definitely starting to see incremental gains in the U.S. economy, which will provide positive data that hopefully mitigates some of the negative, short-term headwinds.”
The S&P 500 climbed for a second day yesterday after the Federal Reserve said the economy maintained a modest to moderate pace of growth and automakers rallied amid the highest car and light-truck sales since May 2007.
Data today indicated fewer Americans than forecast filed applications for unemployment benefits last week while a separate report from the ADP Research Institute showed companies boosted payrolls in August by 176,000 workers.
The Labor Department’s monthly jobs report, which is due tomorrow, will probably show that U.S. payrolls rose by 180,000 in August, while the jobless rate remained at 7.4%, a Bloomberg poll of economists showed.
The Institute for Supply Management’s non-manufacturing index rose to 58.6 in August from 56 the prior month, a report from the Tempe, Arizona-based group showed today. The median forecast in a Bloomberg survey called for a drop to 55. A reading greater than 50 indicates expansion in the industries that make up almost 90% of the economy.
Another report showed orders placed with U.S. factories fell less than forecast in July as rising fuel prices propelled the biggest gain in non-durable goods in a year.