This post was originally published on this site
U.S. stocks traded slightly higher on Thursday following a positive read on private-sector employment, but gains were kept in check as investors sought further confirmation from economic reports amid equity valuations considered rich.
The Dow Jones Industrial Average DJIA, +0.10% rose 25 points, or 0.2%, at 21,032. The S&P 500 index SPX, +0.14% was up 3 points, or 0.1%, to 2,417, trading within points of its intraday record. The Nasdaq Composite COMP, +0.09% rose 7 points to 6,206, a rise of 0.1%. Earlier in the session, it rose as high as 6,225.67, an intraday all-time high for the tech-laden index.
All three indexes are coming off a monthly gain in May and are notably higher for 2017, with the Nasdaq up more than 15% year-to-date. The move has raised some concerns about valuation.
“Fundamentals look good, but valuations look rich, and rich valuations need better than good fundamentals, they need very good fundamentals,” said Stephen Wood, chief market strategist at Russell Investments.
The latest read on private-sector employment surged past expectations in May, coming in well above forecasts. However, weekly jobless claims rose more than expected in the latest week, hitting a five-week high. The releases painted a mixed picture about what could be expected in Friday’s highly anticipated nonfarm-payrolls report.
“The ADP number came in strong, much stronger than consensus, but there’s still some softness in the data that we’re seeing overall,” Wood said.
In other data released on Thursday, construction spending sagged in April as a strong start to the year started to falter. However, the Institute for Supply Management said its manufacturing index edged up a 10th of a point to 54.9%, about even with expectations.
Individual movers: Shares in Palo Alto Networks Inc. PANW, +16.29% jumped 17% a day after the computer security company late Wednesday posted better-than-expected quarterly results. Cloud-based storage company Box Inc. BOX, +6.62% popped 5.2%, briefly hitting a 52-week high intraday, after its own earnings report.
Check out: MarketWatch’s Economic Calendar
On the monetary-policy front, Federal Reserve Gov. Jerome Powell said it would be appropriate for the U.S. central bank to gradually raise interest rates if the economy performs as expected. He added that might also be appropriate if the Fed begins reducing the size of its balance sheet this year.
President Donald Trump has said he would announce his decision on whether the U.S. will keep its commitments to a Paris climate accord at 3 p.m. Eastern.
Other markets: Oil futures CLN7, +0.31% gained, but remained down for the week, after a report late Wednesday from the American Petroleum Institute showed U.S. crude supplies a more-than-expected 8.7 million barrels last week. That sparked hope the official data from the U.S. Energy Information Administration due at 11 a.m. Eastern Time on Thursday also will show a drawdown in inventories.