U.S. Stocks Regain Momentum as Housing, GDP Data Show Strength

  • Shares expand on three-week rally following Trump election
  • Market digests economic news with payrolls report due Friday

U.S. stocks regained their momentum and hovered near all-time highs as traders digested encouraging data on gross domestic product growth and real estate, looking for hints about the strength of the economy ahead of Friday’s payrolls report.

The S&P 500 Index added 0.13 percent to 2,204.66 at 4 p.m. in New York. The Dow Jones Industrial Average rose 0.12 percent to 19,121.60. And the Nasdaq Composite Index gained 0.21 percent to 5379.92

“Notable today is a bit of rotation back into large cap tech stocks that have been lagging,” said Jonathan Krinsky, chief market technician at MKM Partners LLC. “Facebook, Google, Microsoft are all up about one percent and financials are also doing a bit better. Those are big sectors in the market, so that’s obviously helping.”

Stocks have rallied on speculation president-elect Donald Trump will increase fiscal spending to stimulate the world’s largest economy. Investors will turn attention to Friday’s jobs release on clues on the pace of future interest-rate hikes from the Federal Reserve. The probability of a rate increase in December has now reached 100 percent compared with 68 percent chance at the start of November.

The U.S. economy expanded more than previously reported last quarter, rising at a 3.2 percent annualized rate, the fastest in two years, Commerce Department figures showed. Home prices in 20 U.S. cities continued to climb in September, while a gauge of values nationwide exceeded the pre-recession peak, according to S&P CoreLogic Case-Shiller data. The reports added to a recent flurry to better-than-expected economic releases, lifting the Bloomberg ECO Surprise Index to the highest level since August.

Oil slipped before petroleum-producing nations meet and begin work on agreement to curb production. The oil market is pricing in a 30 percent chance of producers reaching a deal to cut output at a meeting on Wednesday, according to Goldman Sachs Group Inc. Freeport-McMoRan Inc., the miner which gets about 11 percent of its revenue from oil, fell 5.1 percent.

“I think people are treating volatility in the crude market as a one off event around the OPEC meeting and really trading stocks on the fundamentals of the improving economic data,” said Art Hogan, chief market strategist and director of research for Wunderlich Securities in Boston.

Among stocks moving on corporate news, Tiffany & Co. added 3.2 percent after the jewelry maker’s third-quarter profit exceeded estimates as demand improved in China and Japan. TiVo Corp. shot up 6 percent at the market’s open but then fell back, adding just 0.2 percent, after the digital-video recording firm signed a licensing deal with Netflix Inc. Amicus Therapeutics Inc. sank 22 percent after U.S. regulators said accelerated approval for its Fabry-disease treatment is not an option.

— With assistance by Rebecca Spalding

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