Stock market gains on better global growth outlook

8/22/2013

NEW YORK — Stocks rose on Wall Street, breaking a six-day losing streak, after encouraging economic figures from Asia and Europe boosted the outlook for global growth.

In China, a survey by HSBC indicated that manufacturing was expanding, the latest evidence that the world’s second-largest economy may be over its recent period of weakness. In Europe, a survey of manufacturing and services for the 17 countries that use the euro climbed to its highest level since June 2011.

“Europe seems to be getting its swing back, especially Germany,” said Doug Cote, chief market strategist at ING U.S. Investment Management. The figures “are not super exciting, but directionally they are good.”

The stock market has had a poor August as traders and investors fretted that the Federal Reserve is poised to start easing back on the economic stimulus that has helped underpin a 4 ½-year bull market. The U.S. central bank is buying $85 billion of bonds a month to hold down long-term interest rates.

The Standard & Poor’s 500 index rose 10 points, or 0.7 percent, to 1,653 as of noon. The index is on track for its best day since Aug. 1.

The Dow Jones industrial average climbed 43 points, or 0.3 percent, to 14,940. The Nasdaq composite gained 34 points, or 1 percent, to 3,634.

The Dow is rallying after falling for six days straight through Wednesday. It’s still down 3.6 percent for the month. The S&P 500 has dropped 1.9 percent in August and is trading close to its lowest in six weeks.

Investors also got some encouraging news on the U.S. economy today.

A gauge of the U.S. economy’s health rose in July, pointing to stronger growth in the second half of the year. The Conference Board’s index of leading indicators increased 0.6 percent last month to a reading of 96. The index was unchanged in June and rose 0.2 percent in May.

The number of Americans applying for unemployment benefits rose last week but remains close to its lowest level in 5 ½ years.

Applications for first-time benefits rose 13,000 to 336,000 in the week ending Aug. 17, the Labor Department said. That’s up from 323,000 in the previous week, which was the lowest since Jan. 2008.

The market rose despite some poor results from a pair of retailing companies.

Sears dropped $3.69, or 8.6 percent, to $39.60 after the company said its second-quarter loss widened as the number of stores in operation declined and the company dealt with lingering effects from its spinoff of the Hometown and Outlet brand. Abercrombie & Fitch fell $8.54, or 18 percent, to $38.27 after the company said that declining traffic and weakness in girls’ clothing pushed its net income down 33 percent in the second quarter.