Retailers lead stocks up; sagging sales hit tech
NEW YORK — Rite Aid, Ross Stores and other retailers rose Thursday after turning in better sales, and major indexes edged up for a fourth day straight.
The discount chain Ross Stores jumped 7 percent, the biggest gain in the S&P 500. The company said that stronger sales in March will likely push profits above its previous estimate.
A surprising drop in claims for unemployment benefits last week gave investors more encouragement. Analysts said it's a possible sign that a slowdown in hiring last month may have been temporary.
The Dow Jones industrial average was up 83 points to 14,886 shortly before 2 p.m., a gain of 0.6 percent. It jumped 128 points the day before. The Standard & Poor's 500 index was up nine points, or 0.5 percent, at 1,596.
Makers of computer hardware and software fell sharply following a report late Wednesday that shipments of PCs dropped 14 percent worldwide in the first three months of this year compared with last year. That's the deepest quarterly drop since International Data Corp. started tracking the industry in 1994.
"The IDC report is much worse than anyone expected," said David Brown, director of Sabrient Systems, an investment research firm. "That's obviously shaking up the tech sector, but everything else is resuming the climb."
The three companies in the Dow that do business in PCs fell the most of the 30 stocks in the index. Hewlett-Packard dropped 6 percent, Microsoft fell 5 percent and Intel 2 percent. Without those declines, the Dow would be 28 points higher.
Rite Aid soared 19 percent after the drugstore chain said higher sales of generic drugs and lower costs helped it post better earnings than analysts had expected. Stronger profits at Bed Bath & Beyond pushed its stock up 1 percent.
The tech-heavy Nasdaq composite index rose three points to 3,300, a gain of just 0.1 percent, far behind the Dow and S&P 500. Of the 10 industry groups in the S&P 500, information technology was the only one to fall.
It was a different story on Wednesday, when technology stocks surged on optimism that businesses would step up spending on computer systems. That pushed the Dow and the S&P 500 index to their third straight day of gains as well as record highs.
The stock market has soared this year, clearing record highs and recovering losses from the financial crisis and Great Recession. For the year, the Dow is up 13 percent, the S&P 500 index 12 percent.
Brown thinks the market can continue climbing. Measured against earnings, the stock market doesn't look expensive, he said. And compared to the alternatives, like bonds or money-market funds, stocks appear to offer a better reward.
In U.S. government bond trading, the yield on the 10-year Treasury note dipped to 1.79 percent from 1.80 percent late Wednesday.