Stocks rise after better housing, jobless reports
NEW YORK (AP) — Stocks advanced, pushing the Standard and Poor’s 500 to another five-year high, after strong reports on housing starts and unemployment claims made investors more optimistic about the U.S. economy.
The S&P 500 gained five points to 1,478 as of 11:05 a.m. EST Thursday, and earlier climbed as high as 1,480, its highest level since December 2007. The Dow Jones industrial average also rose, gaining 57 points to 13,568. The Nasdaq composite rose 11 points to 3,129.
U.S. builders started work on homes in December at the fastest pace since the summer of 2008, the Commerce Department said Thursday. Homebuilder stocks rose broadly following the report. Lennar rose 83 cents to $41.35, KB Home gained 28 cents to $16.43 and D.R. Horton rose 42 cents to $21.42.
The number of Americans seeking unemployment benefits fell to a five-year low last week, the Labor Department reported, the latest sign that the job market is healing. Weekly unemployment benefit applications fell 37,000 to 335,000, a bigger decline than economists had forecast, according to financial data provider FactSet.
The reports helped offset disappointment over the fourth-quarter earnings report of two of the nation’s biggest banks, Citigroup and Bank of America, said JJ Kinahan, chief derivatives strategist at TD Ameritrade.
“The financial stocks are having a tough time impressing the Street with anything,” Kinahan said. “The traditional banks are getting squeezed on margins and the expectations for a lot of those companies had already been set low.”
Citigroup fell $1.20 to $41.28 after its income fell well short of Wall Street’s expectations. The bank’s legal expenses rose and it released less money from its loan-loss reserves.
Bank of America also dropped 39 cents to $11.39 after its earnings declined. The bank is continuing to work on clearing up old problems at its mortgage unit. The bank made $367 million in the last three months of 2012 after paying preferred dividends, down sharply from $1.6 billion in the same period a year ago.
Boeing fell 87 cents to $73.47 after the Federal Aviation Administration said late Wednesday that it was temporarily grounding Boeing’s 787 Dreamliners after battery problems led to an emergency landing of an All Nippon Airways flight. The plane makers stock dropped 3.4 percent the day before.
Stocks started 2013 with a rally after lawmakers came up with a last-minute plan to stop the U.S. going over the “fiscal cliff,” a series of tax hikes and spending cuts that economists say would probably have pushed the U.S. into recession.
The yield on the 10-year Treasury note, which moves inversely to its price, rose three basis points to 1.87 percent.