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Stocks flirt with records as Macy’s soars, oil rebounds

U.S. stocks advanced Thursday as better-than-expected economic data and a rebound in oil prices boosted sentiment among Wall Street investors.

Weekly jobless claims pointed to continued low levels of layoffs while both import and export prices inched up despite a decline in fuel costs, suggesting a possible pick up in inflation.

The S&P 500 index SPX, +0.20 percent  was up 8 points, or 0.4 percent, to 2,183, hovering near intraday all-time highs set on Tuesday. Consumer-discretionary stocks lead the gains among large-cap stocks, partly thanks to a big jump in Macy’s Inc. M, +14.59 percent  stock following earnings.

The Dow Jones Industrial Average DJIA, +0.31 percent  added 78 points, or 0.4 percent, to 18,572. 

Nasdaq Composite Index COMP, +0.21 percent  rose 25 points, or 0.5 percent, to 5,229.

Oil: “There is not much news that markets can react at the moment, so investors are responding to volatility in oil prices, especially in light of the earnings season that showed energy companies still struggling,” said Wouter Sturkenboom, senior investment strategist at Russell Investments.

Sturkenboom noted that high valuations in U.S. large-cap stocks might be keeping investors on edge.

“In the short-term, there is elevated risk downside due to high valuations, especially if earnings in the second half of the year do not rebound. But there is still some momentum chasing among investors that has driven markets to records recently,” Sturkenboom said.

Crude-oil prices CLU6, +1.29 percent  bounced from a sharp drop on Wednesday and were trading higher Thursday. Prices were choppy however, as the International Energy Agency cut its forecast for global oil demand next year, citing a dimmer economic outlook. The agency also warned in its monthly report that a “massive” stock overhang is keeping a lid on oil prices. 

Economic news: Weekly jobless claims ticked down to 266,000, staying below the 300,000 layoff level for 75 weeks in a row. 

The import-price index for July rose 0.1 percent, while export prices ticked up 0.2 percent.

There are no Federal Reserve speakers this week. The next big event for the central bank will be Chairwoman Janet Yellen’s appearance at the Jackson Hole conference on Aug. 26.

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