Dow gains 0.5% ahead of Friday's jobs report
Stocks gained Thursday with the Dow climbing 82 points as investors shook off growing concerns about overvalued stocks and rising interest rates.
Wall Street broke a two-day slide but investors remained cautious after comments by Federal Reserve Chair Janet Yellen Wednesday suggested that stocks are generally overvalued. She said market valuations were generally "quite high" in response to a question about risks to financial stability at a conference.
The Dow Jones industrial average gained 0.5%. The Standard & Poor's 500 index finished up 0.4%. The Nasdaq composite index ended 0.5% higher.
Advances were led by the technology sector. Energy stocks lagged as oil prices fell back below $60 a barrel. U.S. benchmark crude fell about 3% to $59.23 a barrel in New York.
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"Yellen wasn't trying to spook the stock market, but was reminding traders that interest rates will not remain rock bottom forever," said David Madden, market analyst at IG. "The Fed is fully aware that ultra-low interest rates have been a huge factor behind U.S. equities hitting all-time highs this year, and the last thing the U.S. central bank wants is a crash when rates start to rise."
In corporate news:
• Shares of Alibaba (BABA) surged 7.5% as the Chinese Internet giant reported earnings that beat Wall Street expectations and tapped its current chief operating officer Daniel Zhang as its new CEO. Investors were pleased with news that revenue jumped 45%.
• Yahoo (YHOO), which owns about 15% of the Chinese Internet firm, also got a boost as shares jumped 5.2%.
• Online review site Yelp (YELP) skyrocketed 23% on a report that the company was exploring a sale. Yelp is working with investment bankers and has already contacted some potential buyers, according to The Wall Street Journal.
• Lumber Liquidators (LL) fell 0.6% after the company said it was suspending sales of laminate flooring made in China. The company's stock has taken a hit after allegations that the flooring contains toxic levels of formaldehyde.
Overseas, global markets tumbled. In Asia, Japan's Nikkei 225 index fell 1.2% and Hong Kong's Hang Seng index dropped 1.3%. The Shanghai Composite sank 2.8%.
European shares were lower Thursday but were off their lows as Britons voted in the country's general election. Britain's FTSE 100 index was down 0.7% and France's CAC fell 0.3%. Germany's DAX bucked the trend and rose 0.5%.
Stocks fell Wednesday as a combination of rising oil prices and higher interest rates took a toll. The Dow fell 86 points to 17,842 and the S&P 500 fell 9 to 2080.
Contributing: Jane Onyanga-Omara, Associated Press