NEW YORK: More evidence of an improving job market helped lift the stock market Thursday.
The Labor Department reported that the four-week average of applications for U.S. unemployment benefits has fallen in the past month to its lowest point since October 2007, two months before the Great Recession officially began.
Also, a survey from the payroll company ADP showed that American businesses added 176,000 jobs in August, fewer than in June and July but roughly in line with the monthly average for the year.
The encouraging news came heading into today, when the government releases its closely watched report on job growth for August. Many investors believe that strong growth will ensure that the Federal Reserve will start to reduce its bond-buying program later this month.
The U.S. central bank is buying $85 billion in bonds a month to keep long-term interest rates low and to stimulate the economy. Fed stimulus has helped drive a bull market in stocks that has lasted more than four years.
As well as supporting stock prices, the reports helped push the yield on 10-year Treasury notes to 3 percent, the highest level since July 2011.
Thursday’s employment news means that “the Fed probably lays out a tapering schedule in September,” said Phil Orlando, chief equity market strategist at Federated Investors.
While stock trading may be volatile in the coming weeks, investors will ultimately see the reduced stimulus as a positive sign because it means that the economy is strong enough to expand without the Fed’s help, Orlando said. “It should leave stocks in great shape.”
The Dow Jones industrial average rose 6.61 points, or less than 0.1 percent, to 14,937.48.
The Standard & Poor’s 500 index rose two points, or 0.1 percent, to 1,655.08. The Nasdaq composite gained 9.74 points, or 0.3 percent, to 3,658.78.
Some retail stocks were among the biggest gainers. Walgreens gained after reporting a strong rise in sales last month. Walgreens rose 70 cents, or 1.4 percent, to $50.19 after reporting a 4.8 percent increase in sales.
