- Obama military downsizing leaves U.S. too weak to counter global threats, panel finds
- Sen. Tom Coburn vows to slow down budget-busting bills ahead of recess
- Obama fantasizes about more executive power, signs new order on federal contractors
- Clintons call Klein, Halper, Kessler ‘a Hat Trick of despicable actors’: report
- Boehner accuses Obama of ‘legacy of lawlessness’
- Pro-marijuana group claims responsibility for Brooklyn Bridge flag swap
- Young adults shun Obamacare mostly due to cost: survey
- Stabbing attack on transgender girl, 15, was ‘bias motivated,’ police say
- LGBT adults still lean overwhelmingly toward Democratic Party
- Lawmakers rattled by Syria genocide horrors, call on Obama to act
Stocks rise after better housing, jobless reports
Question of the Day
NEW YORK (AP) — Stocks advanced Thursday, 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 was up 11 points to 1,483 as of 2:03 p.m. EST, its highest level since December 2007. The Dow Jones industrial average also rose, gaining 110 points to 13,621. The Nasdaq composite rose 24 points to 3,142.
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. The S&P 500’s homebuilding index climbed 3.1 percent, its biggest gain in almost a month. PulteGroup led the gains with a jump of 98 cents to $20.32.
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,” Mr. 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 $1.36 to $41.12 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 dropped 55 cents to $11.23 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.
Kim Caughey Forrest, a senior analyst at Fort Pitt Capital Group, said it was too early to conclude that the housing market had turned the corner. She noted that a large “shadow inventory” of houses that still need to be foreclosed on may weigh on house prices in the coming months.
“This rally is probably a little bit too optimistic for the information that we got,” Ms. Caughey Forrest said. “There’s some conflicting information here, and the market has just decided to overlook the negative thing.”
Stocks powered higher even as more discouraging news about manufacturing came out. The Philadelphia branch of the Federal Reserve reported that manufacturing contracted this month in the Mid-Atlantic region. On Tuesday, the Fed’s New York branch reported that manufacturing in its own district was worsening.
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 increases and spending cuts that economists say would probably have pushed the U.S. into recession.
The Dow and the S&P 500 are both up 3.9 percent since the start of January.
The yield on the 10-year Treasury note, which moves inversely to its price, rose 5 basis points to 1.89 percent.
Other stocks making big moves:
TWT Video Picks
Both parties recognize the Democrats' scam
- Inside the Ring: Israel surprised by Hamas tunnel network
- CRUZ: A tale of two hospitals: One in Israel, one in Gaza
- Chicken pox outbreak puts illegal immigrant facility on lockdown
- Report: 40% of weapons sent to Afghanistan are unaccounted for
- Israel surprised by Hamas tunnel network
- Sarah Palin's online channel hits snag as Stephen Colbert buys similar URL
- 3 African leaders cancel trip to U.S. over Ebola outbreak; Obama still plans summit
- Feds accept boredom, lack of work as excuses for surfing porn on clock
- Catholic League slams Obama: 'Do Christian lives mean so little to you?'
- Obama military strategy too weak for future security, panel reports
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world