U.S. stocks rose for an eighth straight week, driving the Standard & Poor’s 500 Index to the longest rally in almost a decade, as data on employment and consumer sentiment boosted confidence in economic growth.
Tiffany (TIF) & Co. jumped 9.9 percent on better-than-estimated profit, pacing gains among retailers as investors speculate that an improving labor market and falling gas prices will stimulate holiday sales. Apple Inc. climbed 7 percent, helping lift the Nasdaq Composite (CCMP) Index above 4,000 for the first time in 13 years. Hewlett-Packard (HPQ) Co. surged 8.3 percent as revenue and earnings beat analysts’ estimates. Exxon Mobil Corp. slipped 1.6 percent as energy shares retreated on falling oil prices.
The S&P 500 (SPX) added 0.1 percent to 1,805.81 in the holiday-shortened week, extending its longest weekly advance since January 2004. The Dow Jones Industrial Average (INDU) climbed 21.64 points, or 0.1 percent, to 16,086.41. The Nasdaq Composite surged 1.7 percent to 4,059.89, the highest level since 2000.
“There is a lot of resilience in the stock market,” Jimmy Lee, a managing partner at Las Vegas-based Wealth Consulting Group, said in a phone interview. His firm oversees $1.3 billion. “A lot of investors have missed the big rise in the market. They are anxious to see good news come out of the economy so they have a reason to invest. Any time we get any sort of good news, I think that supports the confidence.”
The S&P 500 and Dow touched record highs during the week as data showed jobless claims unexpectedly fell, the Thomson Reuters/University of Michigan final index of consumer confidence beat estimates and the housing market sustained progress amid rising borrowing costs.
The U.S. market was closed on Nov. 28 for Thanksgiving. The S&P 500 erased a gain in the final minutes of a shortened trading session on Black Friday despite a rally among online retailers.
The S&P 500 finished November with a 2.8 percent increase, its third consecutive monthly gain. December has been the second-best month for U.S. equity returns, according to data compiled by Bloomberg that starts in 1928. The average return for the month is 1.5 percent, more than twice the overall monthly mean of 0.6 percent.
Should stocks match their historic gains in December, it would put the index at 1,832.90 by the end of the year, giving 2013 the best annual return since 1997. The benchmark gauge has rallied 27 percent this year as the Federal Reserve continued its bond purchases to stimulate the economy.
While three rounds of Fed bond buying have helped push the S&P 500 up 167 percent from a bear-market low in 2009, individual investors are just now returning to equity markets.
Deposits to U.S. equity mutual funds have reached about $30 billion in 2013, on pace for the first year since 2006 that equity funds have seen net inflows, according to data compiled by the Washington-based Investment Companies Institute. Almost $400 billion was withdrawn in the previous four years.
“Clients are worried that they might again get left behind,” Ethan Anderson, senior portfolio manager at Rehmann Financial in Grand Rapids, Michigan, said in a phone interview. His firm oversees about $1.5 billion. “The push is into equities and that will continue.”
Investors will watch reports on manufacturing and home sales in the week ahead, and the November release of non-farm payrolls on Dec. 6 to gauge the strength of the economy.
Fed policy makers have been scrutinizing data to determine whether growth is strong enough to withstand a reduction in their bond purchases. Janet Yellen, who will replace Ben S. Bernanke as chairman of the Fed, has said she will ensure monetary stimulus isn’t removed too soon to support economic recovery in the U.S.
Four out of five investors expect the Fed to hold off reducing its $85 billion in monthly bond buying until March or later, according to a Bloomberg Global Poll of investors on Nov. 19.
The Chicago Board Options Exchange Volatility Index (VIX) jumped the most since September, rising 12 percent for the week to 13.70. The gauge of S&P 500 options known as the VIX is down 24 percent this year.
Two out of the 10 main S&P 500 industries gained as technology and consumer-discretionary companies surged more than 1.1 percent.
Tiffany jumped 9.9 percent to $89.14 as retailers climbed. The world’s second-largest luxury jewelry retailer boosted its annual earnings forecast as the rising U.S. stock market gave wealthy consumers the confidence to snap up higher-priced merchandise.
J.C. Penney Co., a department-store chain, soared 15 percent to $10.19. Coach Inc., the largest U.S. luxury handbag maker, added 6.8 percent to $57.90.
Sales among retailers are projected to advance 2.4 percent this holiday, the smallest increase since 2009, the year the recession ended, according to researcher ShopperTrak. Faced with six fewer days between Thanksgiving and Christmas than last year, retailers are pouring on the discounts to lure customers.
Online sales are projected to climb as much as 15 percent to $82 billion during the holidays, more than three times faster than the total gain of 3.9 percent to $602.1 billion, according to the National Retail Federation. Amazon.com Inc. climbed 5.7 percent to $393.62 for the week.
Apple (AAPL) jumped 7 percent to $556.07. The company sold three of every four smartphones in Japan last month after the country’s largest carrier, NTT Docomo Inc., began carrying the iPhone, according to market researcher Kantar Worldpanel ComTech.
The waiting time for the iPhone 5S has shortened as Foxconn Technology Co. boosted production, the Wall Street Journal reported.
Hewlett-Packard surged 8.3 percent to $27.35. Chief Executive Officer Meg Whitman got a boost in her turnaround efforts last quarter as businesses snapped up technology products. Results were buoyed by corporate demand for servers, personal computers and networking equipment.
An S&P index of homebuilders advanced 2.6 percent as reports showed home prices in 20 U.S. cities rose by the most since February 2006 in the 12 months through September and building permits climbed in October to the highest level in more than five years.
PulteGroup Inc. advanced 3 percent to $18.76 while Lennar Corp. climbed 3.5 percent to $35.76.
Energy shares tumbled 2 percent for the biggest retreat among 10 S&P 500 industries, after crude oil reached a six-month low. Exxon Mobil, the world’s largest energy producer, slipped 1.6 percent to $93.48. Schlumberger Ltd., the biggest oilfield services provider, dropped 4.7 percent to $88.42.
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