Stocks rallied Thursday, sending the Standard & Poor's 500 index to its highest level since April, as building permits jumped in July to a four-year peak and Cisco Systems' earnings beat estimates.
Cisco rallied $1.67 to $19.02, while Sears Holdings climbed $3.69 to $60.29 as its loss narrowed. An S&P index of home builders soared 4.4% to the highest level since 2008. Facebook dropped $1.33 to $19.87 and set a new low as the end of a lockup period freed 271 million more shares for trading following its May initial public offering.
The S&P 500 rose 9.98 points, or 0.7%, to 1415.51, just shy of its four-year peak of 1419.04 set on April 2. The Dow Jones industrials added 85.33 points, or 0.6%, to 13,250.11. The Nasdaq composite rose 31.46 points, or 1.0%, to 3062.39
"We're in a situation where the economy is growing, jobs are being created, and the consumer seems to be feeling better about spending," says Jason Benowitz, money manager at Roosevelt Investment Group. "The fact permitting is improving in the housing market suggests the future is going to be there. On the other hand, you have to counterweight the less likely chance of further monetary easing."
Stocks extended gains on reports Spain is about to get an emergency disbursement from a 100 billion-euro ($123 billion) bailout package. German Chancellor Angela Merkel said the European Central Bank's insistence on conditionality in return for help to lower borrowing costs in indebted countries matches her country's priorities to end the crisis in the euro region.
The S&P 500 broke out of a narrow trading range after hovering around 1400 the past seven sessions, with intraday price moves averaging 0.6%, the smallest fluctuation over a comparable period since January 2011, data show. Daily swings in the Dow averaged 0.7% from Aug. 6 through Wednesday, the narrowest since March.
Trading volume and volatility have dropped as traders await policy clues from the Federal Reserve's summit at the end of the month and an ECB meeting in September. The S&P has rallied 11% from a five-month low on June 1 amid speculation global central banks will introduce further stimulus.
Building permits, a proxy for future construction, rose to an annual pace of 812,000, the most since August 2008, the Commerce Department said. The Labor Department said jobless claims climbed 2,000 to 366,000 the week ended Aug. 11. The Fed Bank of Philadelphia said manufacturing in the Philadelphia region contracted in August for a fourth-consecutive month.
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