Article – BusinessDesk
Jan 18 (BusinessDesk) Equities on both sides of the Atlantic rose as buoyant data on the US housing and labour markets as well as better-than-expected earnings from eBay bolstered hopes the economy is in better shape than feared.
While you were sleeping: Housing, jobs data boost stocks
Jan 18 (BusinessDesk) – Equities on both sides of the Atlantic rose as buoyant data on the US housing and labour markets as well as better-than-expected earnings from eBay bolstered hopes the economy is in better shape than feared.
Initial claims for state unemployment benefits last week dropped 37,000 to a seasonally adjusted 335,000, the lowest level since January 2008, according to the Labor Department.
Housing starts increased 12.1 percent in December to their highest level since June 2008, according to the Commerce Department.
“The economy is entering the year maybe not with a running start, but certainly a head start,” Jack Ablin, who helps oversee about US$66 billion as chief investment officer of BMO Private Bank in Chicago, told Bloomberg News. “It helps build a nice story for 2013.”
In afternoon trading in New York, the Dow Jones Industrial Average gained 0.69 percent, while the Standard & Poor’s 500 Index rose 0.64 percent to 1,482.06, and the Nasdaq Composite Index advanced 0.62 percent. Earlier, the S&P 500 touched a five-year high of 1,482.38.
So far corporate results are beating the modest expectations for the fourth quarter. Of the 52 companies in the S&P 500 to have reported results since January 8, 71 percent beat analysts’ earnings estimates, according to data compiled by Bloomberg.
Shares of eBay climbed, last up 3.1 percent, after fourth-quarter sales surpassed expectations, underpinning optimism about the company’s outlook.
“The legacy marketplaces business — it’s kind of carried into mobile,” Bill Smead, who helps oversee 340,378 EBay shares as chief investment officer of Seattle-based Smead Capital Management, told Bloomberg. “You get involved with bidding or selling something on EBay, and it’s nice to carry around the device where you’re doing that with you.”
However, the latest bank earnings disappointed. Shares of Citigroup and Bank of America fell, last down 3 percent and 3.9 percent respectively, after reporting results that failed to please investors.
Shares of Boeing took another beating, last down 0.5 percent, amid increasing concern about problems with its 787s that prompted a worldwide grounding of the company’s newest commercial airliner.
“While it is entirely possible that the current battery issue is resolved in short order, it is also equally possible that the 787s current certification could be called into question,” BB&T Capital Markets analyst Carter Leake wrote Thursday, cutting his rating on the stock to “underweight,” according to Reuters.
Meanwhile, Republicans may be open to a “short-term debt limit extension,” Reuters reported, a move that would eliminate – for now – one key risk to further market advances.
In Europe, the Stoxx 600 Index ended the day with a gain of 0.5 percent from the previous close. The FTSE 100 advanced 0.5 percent, Germany’s DAX rose 0.6 percent, and France’s CAC 40 climbed 1 percent.