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U.S. stocks push higher amid strong economic data

TradingPub Admin | August 8, 2013

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Want some free stock trading education on the type of news that causes global market participants to push equities higher?

A perfect example would be the strong economic data that was released on August 8, and the corresponding increases that happened in the value of U.S. stocks.

Plunging U.S. jobless claims
Data provided by the U.S. Department of Labor indicated that for the four weeks ending on August 3, an average of 335,500 of these claims were filed every seven days, Bloomberg reports. This figure was the least amount for these applications in more than five years.

This comes after the U.S. economy added 162,000 jobs in July, which resulted in the unemployment rate falling to 7.4 percent from 7.6 percent, according to ABC World News. This move was interpreted by many market experts as decreasing the odds that the Federal Reserve will decide to slow down its rate of bond purchases in the near future.

"Despite the drop in the unemployment rate, the softer job growth in July, combined with the downward revisions to May and June, makes the Federal Reserve slightly less likely to reduce its purchases of long-term assets when it next meets in mid-September," PNC senior economist Gus Faucher told the media outlet. 

In addition to the jobless claims report released on August 8, which was viewed as a positive sign, the sentiment of global market participants was also bolstered by Chinese data that indicated strong economic activity, Bloomberg reports.

Chinese trade data
A report indicated that in July, both the imports and exports of the world's second-largest economy managed to surpass the estimates of economists, according to the news source.

Patrick Moonen, who contributes to the management of $244 billion in his role of senior strategist at ING Investment Management in The Hague, told the news source that the robust data could indicate that the economic growth of the nation has become more steady.

A few companies in particular were singled out by the Chinese trade data as doing well, according to The Wall Street Journal. Newmont Mining, as well as Cliffs Natural Resources, stood out as generating some of the strongest results. The first company is involved in the production of gold, while the second is involved in mining iron ore and coal.

Rising stocks
Amid this news, the S&P 500 Index had a strong day, rising 0.4 percent to finish the day at 1,697.39 at 4 p.m. in New York, Bloomberg reports. Anastasia Amoroso, global market strategist at JPMorgan Funds, which manages around $400 billion, told the news source during a phone interview said that the rise in the key index was indicative of steady improvement in economic data.

"It shows that the data is moving in the right direction, so at the end of the day that is a positive catalyst for stocks," Amoroso told the media outlet. "There could be some short-term volatility around how that impacts Fed policy. One thing to keep in mind is if the Fed does actually reduce the pace of purchases, that is for some very good reasons."

The Dow Jones Industrial Average also fared well, trading 0.2 percent higher at 15,506 in the afternoon, according to The Wall Street Journal. The key index was lower early in trade, and then recovered from its position to eke out a gain for the day.

"The recovery is what it has been, slow and steady," Tim Holland, partner and portfolio manager at Tamro Capital Partners, told the media outlet. He has been selecting stocks to purchase based on the earnings that companies have been releasing.

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