Investors are piling back into shares of financial and health care companies, pushing the stock market higher after three days of losses.
Several positive reports on the economy today encouraged investors after a sell-off earlier this week that dragged the benchmark Standard & Poor’s 500 index down 3.8 percent.
A private sector group said its forecast of economic activity rose more than expected in May, marking a second straight gain after seven months of declines.
Earlier today, the government said the overall number of people drawing unemployment benefits fell for the first time since early January. The drop broke a string of 21 straight increases. Separately, the Philadelphia Reserve Bank said manufacturing activity picked up in the mid-Atlantic region.
The positive data helped reassure investors that a recovery is still emerging, but analyst say there may still be more air to be let out of the market’s huge advance since early March, which added as much as 40 percent to the Standard & Poor’s index. Stocks pulled back on the first three days of this week, and analysts say more declines could be on the way.
“I don’t think that this rally is sustainable,” said Scott Armiger, portfolio manager at Christiana Bank & Trust of today’s move. “I still think we have to give up a little bit more.”
In midafternoon trading, the Dow Jones industrials rose 65.60, or 0.8 percent, to 8,562.78. The S&P 500 index rose 7.68, or 0.8 percent, to 918.39, while the Nasdaq composite index rose 3.28, or 0.3 percent, to 1,810.00.
Shares of major banks rose as Treasury Secretary Timothy Geithner appeared before a Congressional panel defending the regulatory overhaul announced the day before by President Barack Obama. He also said he’s seen evidence of healing in the financial sector.
Health care shares, meanwhile, added to gains logged on Wednesday as the Senate continued work on a major revamp of the health care system.
Among financial stocks, JPMorgan Chase & Co., which has branches in Connecticut added $1.16, or 3.5 percent, to $33.89, while Goldman Sachs Group Inc. gained $3.27, or 2.4 percent, to $143.
In other trading, pharmaceutical maker Pfizer Inc., which has research and development operations in Groton and New London, rose 43 cents, or almost 3 percent, to $15.01, while Merck & Co. jumped 94 cents, or 3.8 percent, to $25.71. (AP)
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