U.S. stocks rose, sending the Standard & Poor’s 500 Index to a five-year high, amid better- than-forecast initial jobless claims and housing data.
A measure of homebuilders in S&P indexes jumped 3.1% and was poised for the highest closing level since 2007. EBay Inc., operator of the world’s largest online marketplace, increased 2.7% as revenue topped some analysts’ estimates. BlackRock Inc., the world’s biggest money manager, added 4.4% as earnings increased 24% and the firm boosted its dividend and its share buyback program.
The S&P 500 rose 0.6% to 1,481.93 at 3:51 p.m. New York time. The Dow Jones Industrial Average added 91.96 points, or 0.7%, to 13,603.19, after briefly climbing above the highest closing level since December 2007. Trading in S&P 500 companies was 22% above the 30-day average at this time of day.
“The economy is entering the year maybe not with a running start, but certainly a head start,” said Jack Ablin, who helps oversee about $66 billion as chief investment officer of BMO Private Bank in Chicago. He spoke in a telephone interview. “It helps build a nice story for 2013.”
Equities rose as builders broke ground on more houses than forecast in December, capping the best year for the industry since 2008, another sign residential real estate is boosting the U.S. economic expansion. The number of Americans filing first- time claims for unemployment insurance payments fell more than forecast last week to the lowest level in five years, pointing to further improvement in the labor market.
A separate report showed that manufacturing in the Philadelphia region unexpectedly contracted in January, an indication companies are becoming more concerned about across- the-board U.S. government spending cuts that could slow growth.
The S&P 500 is 5.2% below its all-time high of 1,565.15 set in October 2007. The Dow is 4% away from hitting its record of 14,164.53. About 71% of the 52 S&P 500 companies which have reported quarterly results beat analysts forecasts. Fourth-quarter profits grew 2.5%, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.
The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, rose 1.4% to 13.61, erasing an earlier drop of 1.9 percent.
All 11 companies in a measure of homebuilders in S&P indexes gained. PulteGroup Inc., the largest U.S. homebuilder by revenue, rose 5.4% to $20.39. Toll Brothers Inc., the biggest U.S. luxury-home builder, advanced 3.8% to $36.25.