THURSDAY, July 2, 2009: The stock market's third quarter began on a positive note Wednesday after some reassuring data on manufacturing and the housing market.
The gains were tempered, though, ahead of Thursday's June jobs report. "That's going to be the big one," said Chris Johnson, president of Johnson Research Group. "People are keeping their eye on the unemployment figure." The Labor Department is expected to show another uptick in the unemployment rate to 9.6 percent. Growing unemployment has been keeping investors nervous about consumer spending -- a major driver of growth. After a drop in consumer confidence triggered a stock sell-off Tuesday, the Dow Jones industrial average rebounded Wednesday by 0.7 percent. Other indexes made moderate advances as well.
Much of the day's data was positive, including a report showing more stable manufacturing activity in the United States, and another indicating the fourth straight monthly rise in pending home sales. Stocks also got a boost from European markets, which rose following similarly upbeat manufacturing data in that region. Not all of the economic news was upbeat. Construction spending fell in May by more than the market expected, and according to the ADP National Employment Report, the private sector lost more jobs in June than anticipated. Some of Wednesday's bounce may simply have been due to stocks appearing cheaper following Tuesday's decline and as investors looked to put money to work as the new quarter began.
"Some of the buying that wasn't done yesterday is being done today," said Richard E. Cripps, chief market strategist for Stifel Nicolaus, adding that he was surprised by Wednesday's upward move. "There isn't a lot of convincing volume here to read too much into this."
According to preliminary calculations, the Dow rose 57.06, or 0.7 percent, to 8,504.06. It climbed as high as 8,580.47 in earlier trading, but then pared its gains as the day went on. The Standard & Poor's 500 index rose 4.01, or 0.4 percent, to 923.33. The Nasdaq composite index rose 10.68, or 0.6 percent, to 1,845.72.
