NEW YORK: The stock market rose Thursday after a pair of lackluster economic reports convinced traders that the U.S. central bank will continue to boost the economy with its stimulus program.
Unemployment claims rose and an initial estimate of first-quarter economic growth was revised slightly lower. That suggests the U.S. economy may still need some time to recover from its funk and that the Fed will keep up its $85 billion in monthly bond purchases.
ďThe big worry thatís been hitting the market lately, that the Fed might step back prematurely, might be fading a little today on the idea that the economy does need a bit more support,Ē Jeff Kleintop, chief market strategist at LPL Financial, said.
The S&P 500 index ended up just 6.05 points, or 0.4 percent, at 1,654.41.
The rise was led by banking and insurance stocks, which gained 1.1 percent. Among individual bank stocks, Bank of America rose 35 cents, or 2.6 percent, to $13.87. The stock is trading at its highest in more than two years. JPMorgan gained 95 cents, or 1.7 percent, to $55.62.
Banks and other stocks that stand to benefit the most from an improving economy have surged this week, a change from earlier in the year when investors favored dividend-rich stocks like utilities. Now investors are selling dividend-rich stocks and buying so-called growth stocks. The S&Pís financial index is up 2.1 percent this week, and its utilities index is down 2.5 percent.
The Dow Jones industrial average closed up 21.73 points, or 0.1 percent, at 15,324.53 points.
The Nasdaq composite index rose 23.78 points, or 0.7 percent, to 3,491.30.
Stock investors have had a good year so far. The Dow is 16.9 percent higher and has set record closing highs on nine days in May. The S&P 500 index is up 16 percent and is on track to rise for a seventh straight month, its longest streak since 2009.