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US stocks close at thirteen month highs

Thursday, November 26 06:52:32

US stocks closed ahead last night after light trading, supported by data pointing to stabilisation in the labour and housing markets, areas that have fed concerns about a "double dip" recession.

Trading volume was among the lightest of the year one day before the Thanksgiving holiday, with many senior traders absent from trading floors. Even so, the Dow industrials and the S&P 500 edged to fresh 13-month highs.

The Dow Jones industrial average gained 30.69 points, or 0.29 percent, to end at 10,464.40, a 13 month closing high.

The Standard and Poor's 500 Index rose 4.98 points, or 0.45 percent, to 1,110.63, also as 13 month high, while the Nasdaq Composite Index advanced 6.87 points, or 0.32 percent, to close at 2,176.05.

Natural resource stocks got a lift from the weak dollar, which slumped to a 15-month low against a basket of currencies, partly because the better-than-expected data encouraged investors to look to assets with higher returns.

New claims for jobless benefits fell sharply in the latest week, while sales of new US single-family homes rose in October to their highest level in a year.

Investors have been concerned that the sluggish performance of these areas could push the economy back into recession in a so-called "double dip."

Fred Dickson, market strategist at D.A. Davidson and Co. in Lake Oswego, Oregon, said the drop in weekly jobless claims and stronger home sales set a slightly better economic tone.

"It's a little bit of a Thanksgiving lift on Main Street," he said. "On a different day this week, we probably would have seen a big bounce in the market."

US financial markets will be closed today to mark Thanksgiving.

Shares of energy companies rose as US front-month oil futures climbed USD 1.94, or 2.6 percent, to settle at USD 77.96 per barrel.

On the earnings front, shares of Tiffany added 4.9 percent after the luxury retailer reported third-quarter earnings that beat expectations and raised its full-year profit view.

Deere and Co shares gained 2.7 percent as the world's largest maker of tractors and harvesters reported a quarterly net loss on weak equipment sales and a series of one-time charges.

But the results excluding special items were better than analysts' estimates.

The Chicago Board Options Exchange Volatility Index, or the VIX, a favorite barometer of investor sentiment, sank to its lowest level in 15 months, falling as low as 20.05 during the session. The VIX ended on Wednesday at 20.48, up just 0.05 percent.

Yet another government report showed US consumer spending increased more than expected in October, while a final reading of consumer sentiment was revised up slightly in November, but was still down from October's reading, according to the Reuters/University of Michigan survey.

The positive economic data offset a report on new orders for US durable goods, or long-lasting U.S. manufactured goods, which unexpectedly fell in October, weighing on stocks in early morning trading.

(c) Reuters