Global equity markets rose on Thursday, with the iconic Dow set to extend its winning streak to 10 days, after a report pointed to a stronger labor market and a steady recovery by the United States economy.
United States stocks followed gains that pushed European shares to a 4-1/2 year high after the Labor Department said initial claims for state unemployment benefits unexpectedly fell in the latest week.
Reuters reports that a better measure of labor market trends – the four-week moving average for new claims – fell to the lowest level in five years.
“Every week that claims stay down, it confirms it’s not an anomaly, and this is pretty important,” said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
The downward trend in jobless claims is “one of the reasons the market has been strong year to date,” he said.
A 10-day string of gains by blue chip stocks would be the longest since 1996. US equities have rallied since the start of the year on an improving economy and the Federal Reserve’s easy monetary policy.
“At this point, it’s just pure momentum,” said Brian Gendreau, market strategist at Cetera Financial Group, based in Los Angeles.
The S&P 500 at midday was less than five points away from an all-time closing high of 1,565.15.
The Dow Jones industrial average gained 58.86 points, or 0.41 per cent, at 14,514.14. The Standard & Poor’s 500 Index was up by 5.98 points, or 0.38 per cent, at 1,560.50, while the Nasdaq Composite Index gained 9.92 points, or 0.31 per cent, at 3,255.04.
The European FTSEurofirst 300 of leading regional shares was at its highest level since mid-2008, up by one per cent, lifted by the view on the US economy.
“The current rally is due to the cyclical expectations for the US economy as it recovers,” said Didier Duret, chief investment officer at ABN Amro in Amsterdam.
“The better the US performs, the bigger the hope that we will see some spillover into Europe … We are overweight in equities and we love it,” he added.