US STOCKS – Wall St Rises as Financials and Data Counter Retail Sales, Reports Reuters

Jobless Claims Decrease, Productivity Improves

• Financial shares rise, offsetting lackluster retail sales data.
• Goldman Sachs adjusts oil price forecast upward.
• Dow increases by 0.05%, S&P 500 rises 0.7%, Nasdaq up 0.6%.

By Chuck Mikolajczak

NEW YORK, June 4 – U.S. stock markets experienced gains on Thursday, driven by financial sector advancements and positive news regarding jobless claims and business productivity, even in the face of disappointing retail sales figures for May.

JPMorgan Chase & Co. led the Dow’s climb with a 3.1% increase to $35, following a price target increase from Citigroup. The KBW bank index surged by 3.4%.

New claims for jobless benefits in the U.S. dropped to 621,000 last week, indicating a slowdown in the labor market’s decline. Additionally, non-farm productivity increased by 1.6%, significantly outperforming initial first-quarter estimates.

As retailers reported their May sales figures, investors looked for signs of renewed consumer spending. However, 63% of retailers fell short of Wall Street projections according to data from Thomson Reuters.

"A bit of optimism had built up in the retail sector over the past two weeks, contributing to a noticeable increase," stated Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland. "As a result, some of the comparisons were worse than anticipated."

The Dow Jones Industrial Average climbed by 44.03 points, or 0.51%, finishing at 8,719.31. The Standard & Poor’s 500 Index rose by 6.15 points or 0.66% to 937.91, while the Nasdaq Composite Index increased by 11.37 points or 0.62% to 1,837.29.

Wal-Mart Stores Inc. was a notable drag on the Dow, dropping by 0.8% to $50.49. The world’s largest retailer announced plans to add 22,000 jobs in its U.S. stores for 2009, a decrease from the 33,800 jobs added the previous year. Wal-Mart has also stopped releasing monthly sales data.

Costco Wholesale Corp saw its shares decline by 4% to $46.58, placing pressure on the Nasdaq. The warehouse retail giant reported a 7% drop in May same-store sales, excluding fuel, although there was a 1% increase when fuel was included. This result fell short of analysts’ expectations for a 6.4% decline.

Overall, the S&P retail index decreased by 2.1%.

Meanwhile, energy shares gained traction, with Chevron Corp increasing by 1% to $68.85 following Goldman Sachs’ announcement of a raised oil price forecast for the end of 2009 to $85 per barrel from $65, and a new forecast of $95 for the end of 2010. The PHLX Oil Service Sector index grew by 2.3%.

Intel Corp’s stock rose by 1% to $16.10 after the chipmaker revealed plans to acquire Wind River Systems Inc. for approximately $884 million, or $11.50 per share, in cash, aiming to enhance its position in embedded systems and mobile devices. Wind River’s shares skyrocketed by 44% to $11.55.

Additionally, Ciena Corp’s shares surged by 7.4% to $11.79, despite the company reporting a quarterly loss and a larger-than-expected drop in revenue.

Since hitting a low in early March, the Dow has surged by 32.5%, and the S&P has risen by 38%.