MarketView for August 9

Summary

The Standard & Poor's 500 index extended its rally to a fifth day on Thursday, again eking out a tiny gain as lingering expectations for economic stimulus from central banks lent support to a market lacking new catalysts. While the S&P 500 has chalked up three-month highs every day this week, the index has climbed only 0.6 percent over the past three sessions - an indication that investors aren't prepared to make aggressive bets despite better-than-expected jobless claims and U.S. trade data.

The Nasdaq outperformed the other two major stock indexes, led by Cisco Systems after Goldman Sachs added the company to its conviction buy list and Piper Jaffray upgraded it to "overweight." Cisco rose 3.2 percent to $17.70 and was the Dow's largest percentage gainer.

Material stocks also advanced after James River Coal Co said the market for power-generating coal was showing signs of a recovery following massive industry-wide cutbacks in production. The Company’s shares were up 13 percent to $2.52 while peer company Arch Coal rose 7.1 percent to $7.42.

The three major U.S. stock indexes seesawed throughout the morning, with the S&P 500 mostly hovering above 1,400 in light trade as investors bet central banks would soon act to support a global recovery that has shown signs of stalling.

Markets held on despite a raft of weak Chinese economic data. Annual growth in factory output slowed to its lowest in more than three years in July while annual consumer price inflation hit a 30-month low.

Data showed the number of Americans filing new claims for jobless benefits fell last week while the trade deficit in June was the smallest in 1-1/2 years, hopeful signs for the struggling economy.

Elizabeth Arden forecast 2013 earnings above estimates on stronger sales and its shares rose 13 percent to $44.02.

Of the 445 companies in the S&P 500 that have reported second-quarter earnings through Thursday morning, 68 percent have reported earnings above analysts' expectations, in line with the average over the last four quarters.

Shares of Robbins & Myers were up 27.4 percent to end the day at $59.63 after Varco said it would buy the company for $2.54 billion in cash. Varco shares added 0.8 percent to $76.98.

E*Trade Financial Corp gained 6.9 percent to $8.57 after it replaced its chief executive officer, Steven Freiberg, and said its board had formed a committee to find a permanent replacement.

Volume was light, with about 5.41 billion shares changing hands on the three major equity exchanges, a number that was well below last year's daily average of 7.84 billion shares.