Major stock indexes staged their second straight gain Thursday as a doubling in LinkedIn’s share price spurred hopes initial public offerings can lure more investors into risk assets.
The Dow Jones Industrial Average finished with a gain of 45.14 points, or 0.4 percent, at 12,605.32, led by American Express, which added 76 cents, or 1.5 percent, to $51.82, and McDonald’s, which gained $1.01, or 1.2 percent, to $82.51. The Standard & Poor’s 500-stock index added 2.92, or 0.2 percent, to 1,343.60, boosted by the industrial and telecommunications sectors. The Nasdaq Composite rose 8.31, or 0.3 percent, to 2,823.31 for its third straight gain.
Trading was relatively light, with about 3.3 billion shares changing hands in NYSE composite volume.
Investors said the more than doubling of professional networking site LinkedIn’s stock on its first day of trading ignited hopes for more successful initial public offerings, overshadowing Thursday’s disappointing economic data. A strong market for IPOs tends to mean a strong market for stocks generally. Gaining 109 percent to $94.25 recently, LinkedIn is on track to be 2011’s best-performing initial public offering, according to data from Standard & Poor’s.
Earlier, stocks had lost much of their morning steam after the Federal Reserve Bank of Philadelphia’s reading on mid-Atlantic manufacturing activity plunged, showing barely any growth in May. Meanwhile, sales of previously occupied homes in the US fell slightly in April. The data washed out favorable sentiment after better-than-expected unemployment claims early Thursday.
“The market is trying to digest a mix of news, but the news is generally positive,” said Liz Miller, president of Summit Place Financial Advisors. “[It’s] both the slow, continued move in unemployment numbers and the great success of an IPO like LinkedIn, which shows there’s a risk appetite out there, and people coming into the market at these levels.”
To read more, go to WSJ.com.