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U.S. stocks closed higher Thursday as signs of strength in the economy and higher-than-expected profit at FedEx outweighed a stark warning from the IMF about inaction over Europe's debt crisis.
Trading was volatile before Friday's quadruple witching expiration when not only equity options expire, but also stock index futures, stock index options and individual stock futures.
Stocks pared some of their gains after Christine Lagarde, the head of the International Monetary Fund, said the world economic outlook is "quite gloomy" and will require action by all countries to head off an escalating crisis that carries risks of a global depression.
But investors were cheered by the latest data that suggested the U.S. economy was showing modest growth.
Applications for unemployment insurance fell to a 3-1/2 year low, while a gauge of New York state manufacturing activity rose to its highest level since May and a separate measure of factory activity in the mid-Atlantic region showed a surge in new orders.
The market's gains were concentrated in defensive sectors such as utilities, suggesting uncertainty was causing risk-takers to put their portfolios in neutral as the week draws to an end, said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.
"Unfortunately austerity without a plan for structural changes will cap economic growth and potentially could bleed into earnings. Going into the new year, portfolio managers are squaring their books for that scenario," Morganlander said. "There's a continued rotation into safety and stability in a global austerity environment."
FedEx Corp shares shot up after the package delivery company, seen as a bellwether of economic activity, reported stronger-than-expected quarterly profit.
The news from FedEx was welcome after a number of high-profile companies warned about revenues and profits in recent days. On Thursday, Honeywell International said Europe's slowing economy would take a toll on orders. But Honeywell's stock rose after it forecast profit in line with expectations.
On Wednesday, Wall Street fell for a third day to its lowest level in two weeks with the market highly sensitive to developments in Europe.
Big-cap technology shares slipped, including shares of Apple and International Business machines. Novellus Systems Inc jumped one day after it agreed to be bought by larger rival Lam Research Corp for $3.3 billion in stock.
Michael Kors Holdings Ltd shares jumped in their debut on the New York Stock Exchange after the luxury goods company went public at $20 per share on Wednesday, above the expected range. Earlier Thursday, the stock climbed as much as 25 percent.
Reuters contributed to this report.
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Amazing. FedEx profit going up predictably during the busiest shipping time of the year outweighs the suffocating debt of an entire continent, and this you believe caused the market to go up??
Wait! I found a nickel in my shoe. Consumer spending is going up!!
Good grief....
UPS is going to Bail Out Europe! Now - still in the market? I got out and make a tidy constant stream. Screw Wall Street.
Another day of irrelevant news from MSNBC.
What a shame. Journalists have really lost all ethics.
1) Let's think about what FedEx profit means. Less brick and mortal (BAM) retail sales. Is the increase in mail order greater than the loss in BAM sales ... no. So this news is very bearish for our economy. Moreover, data suggest that not only was holiday shopping "finished" early by those polled, if you adjust sales by the frontloading that occurred (remember stores opening on Thanksgiving), net sales are actually severly down.
2) Unemployment applications are lowest in some time ... again this journalist should stroll down to a local community college and take Economics 101 before being afforded the ability to put articles in circulation. New application for unemployment does not mean new hiring. Why don't you research some terms that are applicable like structural unemployment and how it relates to data like "new applications for unemployment". Long term unemployed are dropped from statistical aggregates such as these. Should we now view these 9 million job seekers as irrelevant?
3) IMF news ... this is accurrate and very late in being widely discussed. It is very significant and is given very little focus. We will have a global depression. The debt economies are going to correct. This is happening not only on the macro (national) level of certain countries (a la the Eurpoean Union) but also on the micro (family) level where those who lived on debt above their means are now floundering.
Tuff times ahead. Statements about how in the US 50% of the people are either low income or poverty aren't even chatted about. No one seems to care. It is this lack of shared obligation that underwrites the coming failure of this country. Very sad.
SO Fedex profits are up and yet the post office can't make any money, Congress is a lying sack of @!$%#.
45 points is climbing?? 0.38% for the day is confidence?? Nobody's doing well on that. Yes better than losing but it was down +200 points the past few days so give me a break with this wild eyed optimism.
I think tomorrow the market will have the jitters about Europe since they didnt today and might fall 100 points.
And then it will be called a slight dip!!
Don't these writers look at the Market before they write their articles??
The market was at a high of 11,967.84 not long after it opened. It closed at 11,868.81 up 45.33 from yesterday,nothing to get excited about. Now it did stay ABOVE yesterdays closing. But nothing to cause a Headline like this.
I don't know, the market seems like it's been into the booze. Maybe drinking too much Johnnie Walker Black Label. In it's drunken stupor it walks uptown and downtown and really ignores any of the news that seems to be irrelevant to it. It also isn't listening to us bloggers while it snoozes away it's big binge.
Hoping the market doesn't wake up with a big hangover.
bah- it will be back down in a week
It is all bullsht...There is no good economic news..there are no new jobs because there is now credit to help fund new material purchase to build new products...etc...etc but there are to many stupid people in this country to understand that...that is why the dumbfk obaama is president...but THAT is why the media is bulshtn everyone about economic growth..just to protect this looser obaama!!! NO JOBS...NO GROWTH!!!
Start the negative spin. Come on all you GOPers and Teatards tell everybody the sky is really falling and this isn't really good news because...The better the economy gets the more absurd you all seem. Ron Paul and the like better be off loading the gold they been hoarding cause it peeked.