Stocks Rise as Economy Strengthens, Central Banks Step Back

U.S. stocks mostly rose Thursday, as markets get accustomed to the idea of investing with less of a safety net from central banks around the world.

The European Central Bank laid out its plan to pull back from the stimulus it’s pumped into markets, but it also said it plans to hold off on raising interest rates for longer than some investors expected. More evidence arrived that the U.S. economy is improving, meanwhile, which helped send the S&P 500 to its fourth gain in the last five days.

The S&P 500 index rose 6.86 points, or 0.2 percent, to 2,782.49. The Dow Jones industrial average slipped 25.89, or 0.1 percent, to 25,175.31, and the Nasdaq composite rose 65.34, or 0.8 percent, to 7,761.04, a record. Roughly four stocks rose for every three that fell.

The European Central Bank also said it will hold off on raising interest rates until at least the summer of 2019, which was more accommodative than some investors had expected.

Its U.S. counterpart, the Federal Reserve, has already halted bond purchases and has increased interest rates seven times since late 2015. Its latest move came Wednesday, when it raised its benchmark rate by another quarter of a percentage point and indicated two more increases this year.

On Thursday, the data for the U.S. economy were nearly uniformly encouraging.

Retail sales jumped in May after shoppers spent more at home and garden stores, gas stations and restaurants. It was the strongest gain in six months, and it fits with economists’ projections that economic growth is picking up following a slowdown during the first quarter of the year.

A separate report showed that fewer U.S. workers filed for unemployment claims last week than expected, an encouraging sign for the labor market.

The yield on the 10-year Treasury fell to 2.93 percent from 2.98 percent late Wednesday. It gave up gains from the prior day, when the Federal Reserve surprised some investors by speeding up its timetable for rate increases.

Lower interest rates can hurt banks by crimping the profit they make from making loans. Financial stocks in the S&P 500 fell 0.9 percent for the biggest loss among the 11 sectors that make up the index.

On the winning side were dividend-paying stocks, whose payouts look more attractive when interest rates are falling. Utilities, telecom stocks and real-estate investment trusts were among the top-performing sectors in the S&P 500.

European stock markets rose more than U.S. indexes, with France’s CAC 40 rising 1.4 percent and Germany’s DAX up 1.7 percent. The FTSE 100 in London gained 0.8 percent. In Asia, Japan’s Nikkei 225 index dropped 1 percent, South Korea’s Kospi sank 1.8 percent.

Stocks from developing economies continued their struggles, which have been compiling since the spring. Investors worry that higher U.S. interest rates will hurt emerging-market economies.

In the commodities markets, benchmark U.S. crude rose 25 cents to settle at $66.89 per barrel. Brent crude, the international standard, fell 80 cents to $75.94.

Heating oil fell 3 cents to $2.16 per gallon, wholesale gasoline dropped 3 cents to $2.09 per gallon and natural gas was close to flat at $2.97 per 1,000 cubic feet.

Gold rose $7.00 to settle at $1,308.30 per ounce, silver gained 27 cents to $17.26 per ounce and copper slipped 3 cents to $3.22 per pound.