Surging mining stocks end a slump on Wall Street
THE ASSOCIATED PRESS August 8, 2013 8:56AM
The stock market is opening higher after a drop in jobless claims and new evidence that China’s economy may be stabilizing. | AP Photo
Updated: August 8, 2013 3:17PM
NEW YORK — Miners and other companies that deal in commodities helped pull the stock market out of a three-day slump.
News that China’s trade rebounded last month signaled the end of a six-month slowdown for the world’s second-largest economy. China is the world’s biggest buyer of raw materials.
The report drove the price of copper to the highest in two months.
The Standard & Poor’s 500 rose six points, or 0.4 percent, to close at 1,697 Thursday.
The Dow Jones industrial average rose 27 points, or 0.2 percent, to 15,498. The Nasdaq composite gained 15 points, or 0.4 percent, to 3,669.
It was the stock market’s first gain this week.
Two stocks rose for every one that fell on the New York Stock Exchange. Volume was below average at 3.2 billion shares.
“The one thing that stands out today is the better news out of China,” said David Joy, the chief market strategist at Ameriprise Financial. “It comes as a pleasant surprise.”
With little other news to drive trading this week, the stock market has meandered lower. The S&P 500 has closed down for three days straight. The index, a benchmark for most mutual funds, has not had a four-day drop this year.
Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Mass., said a number of concerns have weighed on the market this week. Comments from Federal Reserve officials have convinced many investors that the bank will begin pulling back its support for the economy in the coming months.
At the same time, companies are warning of slower sales and turning in tepid second-quarter results. McMillan said it’s starting to look like corporate earnings haven’t kept up with the stock market’s strong pace this year.
“I think people are realizing that stock values are getting disconnected from earnings growth,” McMillan said. “For the rally to continue, people will have to pay more for earnings that aren’t growing that much.”
Mondelez International, the maker of Oreo cookies, turned in better quarterly results than Wall Street had expected late Wednesday. The company also announced plans to spend another $5 billion on buying its own stock. Mondelez International gained $1.40, or 4 percent, to $32.67.
Tesla Motors jumped 15 percent following news that the maker of electric cars blew past Wall Street’s estimates for its most recent quarter. Revenue soared thanks to stronger sales of its Model S. Tesla gained $19.42 to $153.58.
In economic news, the government reported that the average number of people who applied for unemployment benefits over the past four weeks dropped 6,250 to 335,500. That’s the lowest level since November 2007, a month before the Great Recession got underway.
The yield on the 10-year Treasury note fell to 2.59 percent from 2.60 percent late Wednesday.