New York: Wall Street rose on Thursday, with the S&P 500 climbing to a five-year intra-day high, on improved housing and jobs data along with better-than-expected results from online marketplace eBay.
The data showed the number of Americans filing new claims for unemployment benefits fell to a five-year low last week, while ground-breaking for homes rose to the fastest pace in four years last month.
Strength in the housing and labour markets is key to sustained growth and higher corporate profits. Job market improvement helps stimulate consumer spending while a recovery in housing means more purchases of appliances, furniture and other household goods as well as a source of employment.
“The real estate numbers all look good, sales looked good, prices looked good, housing starts looked good,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
“The only thing that still doesn’t look really good in my mind are the employment numbers but even the claims were pretty good and inflation seems to be nonexistent so what’s to stop the party from going?”
The Dow Jones industrial average gained 82.97 points, or 0.61%, to 13,594.20. The Standard & Poor’s 500 Index advanced 8.31 points, or 0.56%, to 1,480.94. The Nasdaq Composite Index rose 17.12 points, or 0.55%, to 3,134.66.
PulteGroup Inc. shares gained 4.9% to $20.29 and Toll Brothers Inc. advanced 2.2% to $35.68. The PHLX housing sector index climbed 2.1%.
EBay’s shares rose 3% to $54.47 a day after it reported holiday quarter results that just beat Wall Street expectations. It gave a 2013 forecast that was within analysts’ estimates.
The S&P is on track for its third consecutive advance, which pushed the index above an intraday peak set in September to its highest since December 2007.
But gains were tempered by weakness in the financial sector, with Bank of America down 4.3% to $11.27 and Citigroup off 3% to $41.22 after they posted their results.
Bank of America’s fourth-quarter profit fell as it took more charges to clean up mortgage-related problems. Citigroup posted $2.32 billion of charges for layoffs and lawsuits, while its new chief executive cautioned the bank needed more time to deal with its problems.
The S&P financial sector index slipped 0.14% as the only one of the 10 major S&P sectors to decline.
S&P 500 corporate earnings for the fourth quarter are expected to rise 2.3%, Reuters data showed. Expectations for the quarter have fallen considerably since October when a 9.9% gain was estimated.
With investors anticipating the current earnings season to be lackluster, their focus will be on the corporate earnings outlook for the months ahead, analysts said.
Shares of Boeing extended recent declines after the US and other countries grounded the company’s new 787 Dreamliner after a second incident involving battery failure. Boeing shed 0.4% to $74.05 and is down 1.5% for the week so far.
Market breadth was solid, with advancers outpacing decliners on the New York Stock Exchange 2,234 to 650, while on the Nasdaq the ratio was 1,602 to 762 in favor of advancing stocks. Reuters