U.S. stocks rose on March 14, as market sentiment was bolstered by news that jobless claims had an unexpected plunge.
U.S. stocks had a strong day, as the Dow Jones Industrial Average and the benchmark S&P 500 enjoyed robust gains. The blue-chip S&P increased 0.6 percent to 1,563.23 at 4 p.m. in New York, and the Dow also increased 0.6 percent to finish the day at 14,539.14, according to Bloomberg. The group of 30 industrial stocks enjoyed its 10th consecutive day of gains, and rose to a new record level.
Data compiled by the media outlet indicated that investors traded 6 billion shares on U.S. exchanges during the day, which was 4.6 percent less than the three-month average.
S&P nears record
Reuters reports that the S&P 500 Index, a key indicator of the stock market, flirted with its record high value of 1,565.15 that it reached in 2007. The group of blue-chip stocks has surged 9.6 percent so far in 2013 and is within just a few points of its all-time high, after spiking 13.4 percent in 2012.
"Hitting a new high is going to send a signal to all of the fence-sitters that maybe it's time to take a fresh look at equities," Alan Gayle, senior strategist at Richmond, Virginia-based RidgeWorth Capital Management, told Bloomberg via phone. "The U.S. economy is reasserting itself in a leadership role in terms of overall economic momentum."
Earlier in the month, the Dow broke past its old record value set in 2007, and set a new record value of 14,539.29 on March 14, according to Reuters.
Falling jobless claims
One economic indicator that could easily contribute to this perception of economic strength is the recent Labor Department report, which indicated that the number of people filing initial applications for unemployment benefits declined by 10,000 to 332,000 during the week ending March 9, Bloomberg reports.
This figure represented a contrast to the median forecast of an increase to 350,000 supplied by economists participating in a survey conducted by the media outlet.
Gayle noted the positive implications of the figure for unemployment applications, stating that "the decline in jobless claims suggests that the job market is continuing to improve."
2013 bull market
Reuters reports that this year, stocks have built on the gains they made in 2012 and have yet to make a significant consolidation. One major factor contributing to this improvement is the monetary easing of the Federal Reserve, which has resulted in the central bank buying trillions of dollars worth of securities and therefore bolstering the money supply. Another factor is the general signs that the broader economy is accelerating in its growth.
"It's simply a natural progression for prices to move to new highs in order for the market to advance. I don't think it's scaring investors," Tim Ghriskey, chief investment officer at Bedford Hills, New York-based Solaris Group, told the news source. "Fund flows really have reversed direction, and money started moving out of money markets and some from fixed income to equities."
He noted the importance of this shift in investor preference, stating that "this kind of trend doesn't change easily so we can expect a lot more to come in."
'Fuel on the fire'
Jeffrey Davis, chief investment officer at Boston-based Lee Munder Capital Group, which has $5 billion under management, noted the combination of bullish indicators when speaking with Bloomberg in a phone interview, saying that "it's a little bit more fuel on the fire."
He expressed his expectation of further gains, saying that "in spite of the fact the market's not as cheap as it once was, it's looking like the rally should continue."
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