Wall Street opened higher on Thursday after cheery economic reports showed first-time claims for unemployment benefits dropped to a five-year low and housing starts surged.
“It’s great news and it should take the markets higher,” Frank Lesh, a futures analyst and broker at FuturePath Trading in Chicago, said of the data.
The Standard Poor’s 500-stock index rose 0.3 percent in early trading, hitting a fresh five-year intraday high. The Dow Jones industrial average added 0.3 percent and the Nasdaq composite index gained 0.4 percent.
The S.P. 500’s gain above September’s intraday peak of 1,474.51 points put it at its highest since late December 2007. The index closed at 1,472.63 on Wednesday.
Shares of Bank of America and Citigroup were lower after the two major banks reported results. Bank of America’s fourth-quarter profit fell from a year ago as it took more charges to clean up mortgage-related problems, while Citigroup posted $2.32 billion of charges for layoffs and lawsuits, though its fourth-quarter profit rose.
EBay’s shares rose 2.5 percent, a day after it reported holiday quarter results that just beat Wall Street expectations. It gave a 2013 forecast that was within analysts’ estimates.
Shares of Boeing extended a recent slump after the United States and other countries grounded the new 787 Dreamliner following a second incident involving battery failure. Boeing was down 0.9 percent.
Solid earnings from Goldman Sachs and JPMorgan Chase on Wednesday helped lift estimates for S.P. 500 corporate earnings slightly to a 2.2 percent gain, Thomson Reuters data showed.
With investors anticipating a lackluster earnings season, the focus will be on the corporate earnings outlook for the months ahead, analysts said.
“That gives you a bigger picture of where the economy might be headed. I think you have to stitch together all the information and get a true picture of how robust the economies of the world are,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
“We’ve all dismissed what’s going to happen in this fourth quarter. Estimates are pretty low, the companies that can’t step over the lower bar are probably going to get punished.”
European markets rose. The CAC 40 index of French stocks added 0.9 percent, the DAX in Frankfurt gained 0.7 percent and the IBEX 35 in Madrid rose 0.6 percent.
Article source: http://www.nytimes.com/2013/01/18/business/daily-stock-market-activity.html?partner=rss&emc=rss
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