Stocks bounce around as caution again raises head
NEW YORK -- Stocks zigzagged in light trading Thursday following a Philadelphia Federal Reserve report that regional manufacturing conditions weakened more than expected.
Investors are also cautious after small business lender CIT Group CIT said negotiations with regulators about a rescue broke off. That is hurting financial stocks as traders worry that CIT could file for bankruptcy.
Stocks have surged this week on upbeat earnings reports and forecasts so the market's pause isn't surprising.
Stocks mostly rose early Thursday as an unexpected drop in new jobless claims and strong earnings from JPMorgan Chase.
The Labor Department said new claims for unemployment insurance plunged last week by 47,000 to 522,000, the lowest level since early January. Economists polled by Thomson Reuters predicted an increase to 575,000.
The improved data, however, may have been affected by the timing of automobile plant shutdowns, analysts said. Eric Thorne, an investment adviser at Bryn Mawr Trust, said the figures were "skewed."
The market had been surging throughout the week on upbeat earnings reports and forecasts, restarting a rally that stalled last month. The positive reports added to beliefs the economy was in better shape than previously thought. Overseas markets were higher.
CIT's fate has tempered some of the excitement over upbeat earnings reports and outlooks from companies like JPMorgan and chipmaker IntelINTC.
JPMorgan jpm said Thursday it generated record revenue, spurred on by strong investment banking operations. Its results come two days after earnings at another banking giant, Goldman SachsGS, also topped expectations.
The strong earnings from the banks has provided fuel to beliefs the economy is rebounding. The results also show that many of the nation's biggest banks have quickly recovered from the collapse of credit markets last fall that led to the failure of Lehman Brothers and near collapse of American International Group.
Thursday brings even more earnings reports that could provide additional signs into how the economy is faring. Internet powerhouse GoogleGOOG and computer maker IBMIBM both report earnings after the market closes.
The market soared Wednesday as investors felt better-than-expected earnings reports from companies like chipmaker Intel showed the economy might be in better shape than thought.
All the major indexes rose about 3%, and the Dow jumped 257 points for its biggest one-day gain in nearly four months.
Meanwhile, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.58% from 3.62% late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18% from 0.17% late Wednesday.
Overseas, Japan's Nikkei stock average rose 0.8%. In afternoon trading, Britain's FTSE 100 rose 0.2%, Germany's DAX index rose 0.7%, and France's CAC-40 gained 1%.