Positive economic, earnings reports return Dow, S&P 500 to record territory
Stocks rebounded Thursday, sending the Dow Jones industrial average and Standard & Poor’s 500 index back into record territory.
It was the second record-high close for the Dow this week and the third for the S&P 500. The modest gains erased losses from the day before, pushing the three major stock indexes further ahead for the week.
Good news on housing and the job market and another dash of strong corporate earnings helped to drive stocks higher, reversing a decline earlier in the day. Energy stocks led the gainers in the S&P 500 as oil prices rose.
Discouraging economic data out of Europe and China stoked worries of a global economic slowdown and sent stocks lower in early trading. But investors shrugged off those concerns, reassured by a batch of positive U.S. economic reports.
“Housing was good, leading indicators were good, manufacturing was good,” said Doug Cote, chief market strategist at Voya Investment Management.
Traders also drew encouragement from retailers including Best Buy, Dollar Tree and Kirkland’s, which reported better-than-expected earnings. Third-quarter earnings for companies in the S&P 500 are at an all-time high.
“That’s a signal for investors that the fundamentals are solid behind this market,” Cote said.
In the end, the S&P 500 index rose 4.03 points, or 0.2 percent, to 2,052.75. That’s just above the index’s previous record-high close on Tuesday at 2,051.80. The S&P 500 is up 11.1 percent this year.
The Dow gained 33.27 points, or 0.2 percent, to 17,719. That’s up from its last record-high close of 17,687.82 on Tuesday. The Dow is up 6.9 percent this year.
The Nasdaq composite added 26.16 points, or 0.6 percent, to 4,701.87. The tech-heavy index is up 12.6 percent this year.
Sales of previously occupied homes increased in October on an annual basis for the first time this year, according to the National Association of Realtors. The report helped lift the stock prices of many homebuilders. William Lyon Homes led the gainers, adding 97 cents, or 5 percent, to $20.23.
Meanwhile, the Labor Department said applications for unemployment benefits fell slightly last week to a seasonally adjusted 291,000. The applications, which are a proxy for layoffs, have fallen 16 percent in the past 12 months.
Also on Thursday, the Federal Reserve Bank of Philadelphia said its regional manufacturing index rose to the highest level since 1993, adding to other recent evidence that U.S. manufacturing is expanding modestly and helping boost economic growth.
That data offset worries over the 18-country eurozone, where a broad gauge of business activity fell this month to a 16-month low. In China, a preliminary survey showed manufacturing in the world’s second-largest economy slid to a six-month low this month.