Stocks gain after unemployment claims fall

3/8/2013

NEW YORK — Stocks rose on Wall Street today, pushing the Dow Jones industrial average to new highs, after the government said unemployment claims fell last week.

The Dow rose 40 points, or 0.3 percent, to 14,336 as of 12:20 p.m. The Standard & Poor's 500 gained three points, or 0.2 percent, to 1,544. The Nasdaq composite advanced 10 points, 0.3 percent, to 3,232.

The market got a boost after the Labor Department reported that the number of Americans seeking unemployment aid fell by 7,000 last week, driving the four-week average to its lowest in five years. The drop is a positive sign ahead of Friday's employment report.

The Dow barreled through a record high Tuesday and has since added to those gains. The S&P 500 is also closing in on its own record high of 1,565, which was also reached on Oct. 9, 2007, the same day of the Dow's previous peak. The S&P would need to rise 20 points, or 1.3 percent, to set a record.

Investors have been buying stocks on optimism that employers are slowly starting to hire again and that the housing market is recovering. Growing company earnings are also encouraging investors to get into the market. The Dow is 9.4 percent higher this year and the broader S&P 500 is up 8.2 percent.

“If you have a multi-year time horizon, equities are an attractive asset, but don't be surprised to see some volatility, especially after the big run we've had,” said Michael Sheldon, chief market strategist at RDM Financial Group.

Among stocks making big moves:

— PetSmart fell $4.67 to $61.88 after the company reported its fiscal fourth-quarter earnings. Profits for the pet store chain rose but its forecast for this year disappointed investors.

— Pier 1 Imports fell 91 cents to $22.36 after the home decor company issued an earnings forecast that was below Wall Street analysts’ estimates.

— Supermarket chain Kroger rose $1.14 to $3.59 after the company's fourth quarter profit handily beat Wall Street expectations.

— Gap rose $1.31 to $35.76 after the clothing retailer said a key revenue measure rose more than expected in February, helped by sales at its Gap and Old Navy stores. The company had been scheduled to release the sales figures after the market closed, but put them out after a transcript of its recorded sales call appeared on the website seekingalpha.com, halting the shares.