Good economic news boosts stocks

First Posted:

STAN CHOE AP Business Writer
NEW YORK — Wall Street’s wildest week since 2008 continued with another 400-plus point move for the Dow on Thursday. This time, stocks shot up after investors saw small signs that the economy might not be headed into another recession.

Fewer Americans joined the unemployment line last week, and a technology bellwether said revenue could grow faster this quarter than analysts expected. The news pushed prices on long-term Treasurys down, and gold fell from its record high.
During a calm market, a 400 point move would rank as the Dow’s biggest in months. During this volatile week, it’s among the smallest. On Monday, the Dow plunged 634 points only to gain 429 points Tuesday and then sink 519 points Wednesday. It is the first time in its history that the Dow had four straight 400-point days.
Such big up-and-down swings are reminiscent of 2008, when the financial crisis battered stocks.
Carlton Neel, who manages about $2 billion as a senior portfolio manager at Virtus Investment Partners said investors are so scared of being the last one out of the market in a downturn or the last one in during a rally that they are stampeding in herds, creating more volatility.
“Fear tends to be a much more powerful emotion, and the sell-offs tend to be more violent than the rallies,” he said. “But people are worried about missing the bottom, so you will have a few melt-ups along the way.” On Friday, the government will say how much people spent at retailers during July. Economists expect a 0.4 percent rise, according to FactSet.
Thursday’s gains came after the government said the number of people filing for unemployment benefits for the first time fell to 395,000 last week, down 7,000 from a week earlier. It’s the first time the number has dropped below 400,000 in four months.
Technology stocks helped lead stocks higher. Cisco Systems Inc. profit for the latest quarter topped analysts’ expectations. Cisco is considered a bellwether for the tech industry because it is the world’s largest maker of computer networking equipment. The company also said revenue may grow more quickly in the current quarter than analysts were anticipating.