New York: Stronger-than-expected data on US housing starts and jobless claims lit a fire under stocks on Thursday, pushing the S&P 500 to a five-year high and its third day of gains.
A pair of economic reports lifted investors’ sentiment. The number of Americans filing new claims for unemployment benefits fell to a five-year low last week and housing starts jumped last month to the highest since June 2008.
Strength in the housing and labour markets is key to sustained growth and higher corporate profits, helping to bring out buyers even on a day when earnings reports were mixed.
Gains were tempered by weakness in the financial sector, with Bank of America down 4.2% to $11.28 and Citigroup off 2.9% to $41.24 after their results.
In other negative earnings news, shares of chipmaker Intel fell 5.2% to $21.49 in extended-hours trading after the company forecast quarterly revenue that fell short of analysts’ expectations. Intel Corp had ended the regular session up 2.6% at $22.68.
The S&P 500 ended at its highest since December 2007 and now sits just 5.6% from its all-time closing high of 1,565.15.
“Having consolidated really for the last two weeks, the fact that we broke out, I think that that is sucking in quite a bit of money,” said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
The Dow Jones industrial average was up 84.79 points, or 0.63%, at 13,596.02. The Standard & Poor’s 500 Index was up 8.31 points, or 0.56%, at 1,480.94. The Nasdaq Composite Index was up 18.46 points, or 0.59%, at 3,136.00.
Better-than-expected earnings and revenue reported by online marketplace eBay late Wednesday helped the stock gain 2.7% to $54.33.
In the housing sector, PulteGroup Inc shares gained 4.9% to $20.29 and Toll Brothers Inc advanced 3.1% to $35.99. The PHLX housing sector index climbed 2.4%, reaching its highest close since August 2007.
Semiconductor shares rose 2% to the highest close in eight months.
Financials were the only S&P 500 sector to register a slight decline for the day.
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.
Energy shares led gains on the Dow as US crude oil prices jumped more than 1%. Shares of Exxon Mobil were up 0.8% at $90.20 while shares of Chevron were up 0.7% at $114.75.
S&P 500 earnings are expected to have risen 2.3% in the fourth quarter, Thomson Reuters data showed. Expectations for the quarter have fallen considerably since October when a 9.9% gain was estimated.
Volume was roughly 6.5 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.
Advancers outpaced decliners on the NYSE by about 22 to 7 and on the Nasdaq by about 2 to 1.