U.S. stocks rise on improved global view
Shares of Tiffany fall sharply after it issues profit warning
NEW YORK (MarketWatch) — U.S. stocks rose on Thursday, lifting the S&P 500 to a five-year closing high, after data from China bolstered the view of an improving global economy.“Chinese growth is accelerating and the market over the last day or so seems to have taken on a more positive tone as it relates to earnings,” said Mark Luschini, chief market strategist at Janney Montgomery Scott.
December exports data from China beat expectations, while European Central Bank President Mario Draghi projected that the euro zone’s economy would bounce back later this year.
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“In Europe the recession is not worsening, Chinese growth is accelerating and in the U.S., the worst of the fiscal cliff is behind us. The impact of tax cuts is less than what the CBO initially scored, which has the potential to lift confidence and as a result business spending,” said Luschini.
The Dow Jones Industrial Average (DJI
JIA) gained 80.71 points, or 0.6%, to 13,471.22.
Bank of America Corp. (NYSE:BAC) led blue-chip gains, which included 25 of the Dow’s 30 components.
Banks and other financial companies have drawn support this week as the government’s consumer finance watchdog on Thursday unveiled mortgage rules that will make banks use new standards to determine if a borrower has the ability to repay a mortgage. And several large home-loan providers earlier in the week came to an accord with regulators to close a review of foreclosures ordered by the government.
Five days after closing at its highest level since December 2007, the S&P 500 cleared its five-year closing high of 1,466.47.
The S&P 500 (SNC:SPX) added 11.10 points, or 0.8%, to 1,472.12, with financials leading sector gains among its 10 major industry groups. Financial stocks: Wells Fargo shares rise on eve of results.
Microsoft Corp. (NASDAQ:MSFT) fell 0.9% after Morgan Stanley downgraded the globe’s biggest software manufacturer to equalweight from underweight.
Tiffany & Co. (NYSE:TIF) reported holiday-season sales that hinted the luxury retailer’s rapid growth of recent years was languishing in the United States, Europe and Japan. The company projected annual earnings at the low end of its prior guidance. Shares of Tiffany shed 4.5%. Read: Tiffany sparkle fades.
“Especially with earnings season beginning, we’re much more focused on stock-specific reports,” said Dan Greenhaus, chief global strategist at BTIG LLC.
After falling into the red, the Nasdaq Composite (NASDAQ:COMP) recouped to end at 3,121.76, up 15.95 points, or 0.5%.
Shares of Apple Inc. (NASDAQ:AAPL) rose 1.2%. The Wall Street Journal reported that Apple CEO Tim Cook recently met with the chairman of China Mobile, triggering speculation that the mobile carrier may soon be offering the iPhone. Read: China Mobile chairman, Apple CEO talk cooperation.
Also read a commentary piece: Last stand for Apple bulls?
For every stock falling nearly two gained on the New York Stock Exchange, where 727 million shares traded.
Composite volume exceeded 4 billion.
“The jobs data was benign, and the wholesale data nobody cares about,” said Greenhaus of U.S. economic reports, which had inventories at U.S. wholesalers up 0.6% in November and new applications for jobless benefits rising slightly last week. However, the level of jobless claims revealed little change over the past few months and was consistent with a modestly improving U.S. labor market. See: Jobless claims rise to 371,000.
