Stocks rallied on Thursday with the most robust intraday gains in a month, as trading volume recovered following the onslaught of Hurricane Sandy, and positive economic data signaled a widely-followed employment report due Friday would likely be positive.
Shortly after lunchtime, the S&P 500 Index of U.S. equities was trading at 1,425.67, up 13.51 or 0.95 percent from the previous day’s close. Driven by an even larger rally in technology stocks, the tech-heavy Nasdaq Index was up even more, notching a rise of 1.41 percent during the same period.
The rally was the most dramatic in over a month, a time-frame that has been marred by disappointing corporate earnings reports.
“We’ve had a bit of a correction into this earnings season … but the consistency of the improvement in the economic data is what’s catching everyone by surprise and it probably portends something for [Friday’s] jobs numbers,” Art Hogan, managing director at Lazard Capital, told CNBC.
The headline economic release of the day was a reading on manufacturing activity. The U.S. ISM manufacturing index jumped to 51.7 in October, indicating an expansion, above economist expectations.
Retailers also reported robust same-store sales figures for the month.
On the labor front, weekly jobless claims fell. A revamped employment report by human resources firm ADP, which investors appeared to be taking at face value in spite of the fact it used new methodology, showed the private sector adding a better-than-expected 158,000 jobs in the month.
Economists agreed the numbers were cause for some mirth, but still cautioned they did not show the economy on a solid path to recovery.
“The data still tells me we’re in a modest growth and modest inflation economy going into next year,” Scott Wren, a senior equity strategist at Wells Fargo Advisors, told MarketWatch, adding “I don’t want to read too much into the day’s move because tomorrow could erase it with one fell swoop or build on it.”