Stocks Finish Higher on Strong U.S. Data
NEW YORK ( TheStreet) -- The major U.S. indices finished about 1% higher Thursday on a set of strong domestic economic headlines.
The Dow Jones Industrial Average gained 123.1 points, or 1%, at 12,904, bouncing back from an almost 100-point drop the previous day, its worst session of the year. The S&P 500 rose 14.8 points, or 1.1%, at 1358. The Nasdaq added 44 points, or 1.5%, at 2960. All major sectors had been trading in the green, led by basic materials, consumer cyclical stocks and technology.
According to S&P Capital IQ, the S&P 500 was less than 1% away from eclipsing its 1363 recovery high as of Feb. 14, and could succeed in the coming weeks. However, says, Sam Stovall, chief equity strategist, S&P Capital IQ, "just as it takes several energetic attempts to open a rusty door," the index will need to backtrack a few paces before achieving the necessary momentum.
A spate of better-than-expected domestic data was lifting sentiment. The number of Americans seeking first-time unemployment benefits fell 13,000 to 348,000 in the week ended Feb. 11 from a revised 361,000 the previous week, according to a Labor Department report. Economists expected claims to rise to 365,000 from an originally reported 358,000.
Housing starts rose 1.5% to a seasonally adjusted 699,000 in January from a revised 689,000 in December, according to a Census Bureau report. Economists had expected starts to climb 2% to 670,000. Building permits rose 0.7% to 676,000 for the month. Single-family building permits rose 0.9% to 445,000 from a revised 441,000 in December.
"While we still do not expect housing to become an engine of growth for the U.S. economy anytime soon, there is every reason to believe that it has finally hit bottom," says Millan Mulrain, senior U.S. strategist at TD Securities.
The January producer price index rose 0.1%, after falling 0.1% in December. Core producer prices, excluding food and energy, rose 0.4% in January, the largest increase since July, following a rise of 0.3% in December.
The Federal Reserve Bank of Philadelphia said manufacturing activity in the region picked up in February. The bank's general activity index rose to a reading of 10.2 from 7.3 in January.
As market action heated up, James "Rev Shark" DePorre, founder and CEO of Shark Asset Management, said "even though the market is holding up well, the problem we encounter is that the dip-buyers are backing off and the sellers are showing more resolve, hitting the market harder when it spikes."