The reports come ahead of Friday’s report on U.S. nonfarm payrolls and the unemployment rate for December from the Labor Department.
BY KATE GIBSON | MARKETWATCH
NEW YORK — U.S. stocks reverted to gains Thursday, with banks leading the rise that had the S&P 500 extending its advance into a third day, as an improving labor market curtailed concern about Europe.
“Markets have comeback for the most part, the ADP employment number was pretty robust, although there were seasonal things in there as well, and jobless claims were in line to modestly better,” said Stephen Carl, a floor trader for the Williams Capital Group.
“We’re still contemplating overseas, or the financial situation in Europe,” Carl added.
Helping the Dow Jones industrial average recover from a 134-point deficit, Bank of America Corp. rallied 8.6 percent after Deutsche Bank AG reiterated a positive view of banks, saying fourth-quarter results should yield some hopeful signs.
Speculation the White House might unveil a new nationwide loan refinancing plan was also in play, sparked in part by a note from Jaret Seiberg, a policy analyst at the Washington Research Group, in which he speculated that President Barack Obama might place a housing advocate at the Federal Housing Finance Agency.
The Dow industrials finished down 2.72 points at 12,415.70.
Blue-chip decliners included Boeing Co. after the plane manufacturer said it fell behind schedule and did not deliver as many 787 Dreamliner and 747-8 jumbo jets as planned last year.
Extending gains into a third day, the S&P 500 rose 3.76 points, or 0.3 percent, to 1,281.06.
SunTrust Banks Inc. gained 5.4 percent and JPMorgan Chase & Co. gained 2.1 percent. Both were tabbed as “top picks” among lenders by Deutsche Bank.
Among the index’s notable risers, Monsanto Co.’s shares gained more than 5 percent after the seed producer raised its outlook for the full fiscal year as it reported first-quarter results.
Off the S&P 500, Barnes & Noble Inc. shares fell 17 percent after the book seller reduced its profit outlook and said it might separate its electronic and reader business from its physical stores. Barnes & Noble’s Nook reader vies with Amazon.com Inc.’s Kindle and Apple Inc.’s iPad.
The Nasdaq composite rose 21.5 points, or 0.8 percent, to 2,669.86.
Crude-oil futures finished the floor session at $101.81 a barrel, down $1.41, or 1.4 percent, relinquishing its gain in the final hour of trade after the Energy Department reported that inventories climbed last week.
“We’re in a tug of war between the belief the U.S. economy is hanging in on one side and the turmoil in Europe and the ripple effects it will likely have everywhere on the other,” said Peter Boockvar, equity strategist at Miller Tabak.
U.S. economic data out Thursday included ADP Employer Services reporting a 325,000 increase in private payrolls last month, an increase much better than anticipated. Figures from the Labor Department showed initial applications for jobless benefits falling 15,000 to 372,000 last week.
The reports come ahead of Friday’s report on U.S. nonfarm payrolls and the unemployment rate for December from the Labor Department.