Dow, S&P close at records; Intel up 4%
U.S. stocks closed at highs on Thursday after encouraging domestic data alleviated concerns over continued signs of slowing growth in Europe and China.
The Dow Jones Industrial Average ended the day at a record for the 27th time this year, while the S&P 500 closed at a record for the 44th time.
Intel led blue chips by gaining more than 4 percent after the technology firm reported an upbeat outlook for 2015 revenue and raised its dividend. The California-based company has benefited from a stabilizing personal computer market.
"Moving into next week—which is an abbreviated session—the market is going to spend some time on the higher end," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The market is responding to the fact that we have solid fundamentals. The effect of weaker Chinese activity and (in) Euro land is not going to take much wind. We're finally seeing, in terms of economic growth, the effects of QE kicking in."
In the morning, the Philly Fed Index posted 40.8 for November, more than double the expected 18.3 and the highest since December 1993. Existing home sales hit 5.26 million and leading indicators gained 0.9 percent, both beating expectations for October.
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"We're getting a clear signal at the very least the U.S. economic data continues to be stronger... than the rest of the developed countries," said Art Hogan, chief market strategist at Wunderlich Securities.
Overnight, the Euro zone November flash composite purchasing manager's index (PMI) from Markit came in at 51.4, below estimates and October's final reading of 52.1. China's flash PMI from HSBC fell to 50.0, the breakeven level that separates expansion from contraction.
"Any prolonged weakness out of Europe is going to affect the U.S. 2015 macroeconomic outlook," said Nick Raich, CEO of The Earnings Scout. He is waiting for action by the European Central Bank to stop deceleration in the Euro zone.
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In the United States preliminary PMI data from Markit also posted a slowdown, with a fall to 54.7 from October's final reading of 55.9. Analysts had expected a rise.
"Right now the market is just seeing the glass half-full in this chase for the year-end rally," said Peter Boockvar, chief market analyst at The Lindsey Group. "The mood is getting exaggerated now."
Stocks turned positive after opening lower on U.S. weekly jobless claims that fell more than expected at 291,000, with continuing claims the lowest since 2000. The Consumer Price Index for October was unchanged.
"There's this consensus that inflation is collapsing, and that clearly is not the case. If people are hanging their hat on the Fed not doing anything because there's no inflation, the CPI shows that's not the case," Boockvar said.
"Weakness in Europe on the weak data is the catalyst for selling here," he said.
Some analysts saw weakness abroad as an opportunity.
"I think the bottom line here is the U.S. economy and stock market are the only place to put money," said Marc Chaikin, head of Chaikin Analytics.
"I think everybody has settled on the assertion that the U.S. is getting stronger and (given world events) is probably the best place to invest," said Kim Forrest, senior equity analyst at Fort Pitt Capital. She also noted that the relatively low trade volume ahead of next week's holiday.
Chinese e-commerce giant Alibaba sells its first-ever bond on Thursday, a jumbo trade expected to be around $8 billion in size and could extend to $10 billion. With pricing expected this afternoon, the bond offering comes just two months after the company's record IPO.
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In U.S. retail, Best Buy rose nearly 7 percent after posting strong earnings in the morning.
The Security and Exchange Commission suspended trading in four microcap companies touting development of Ebola-related treatments or services, citing a lack of publicly available information about their operations.
The companies—Bravo Enterprises, Immunotech Laboratories, Myriad Interactive Media and Wholehealth Products—were not able to be reached for comment.
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U.S. stocks were little changed on Wednesday, with benchmarks at or near all-time highs, as Wall Street took in stride minutes from the Federal Reserve's last policy meeting, which had some central bankers concerned prices are not increasing rapidly enough.
The minutes from the Federal Open Market Committee October meeting released on Wednesday sounded mostly dovish, as Fed members expressed concern for the global economy.
Major U.S. Indexes
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|---|
| .DJI | Dow Jones Industrial Average | DJIA | 39,872.99 | +66.22 | +0.17% |
| .IXIC | NASDAQ Composite | NASDAQ | 16,832.62 | +37.75 | +0.22% |
| .SPX | S&P 500 Index | S&P 500 | 5,321.41 | +13.28 | +0.25% |
The Dow Jones Industrial Average rallied in the close to end up 33.27 points, or 0.19 percent, at 17,719.00, with Intel leading gains and Disney the greatest laggard.
The closed up 4.03 points, or 0.20 percent, at 2,052.75, with energy leading gains in six of ten sectors while telecommunications led declines.
The Nasdaq ended up 26.16 points, or 0.56 percent, at 4,701.87.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded just under 14.
Advancers were a step ahead of decliners on the New York Stock Exchange, with an exchange volume of 659 million and a composite volume of 3.1 billion in the close, the lowest level in more than a week.
The 10-year note yield was 2.34 percent, up from 2.31 in the morning. The U.S. dollar gained slightly against major world currencies.
Crude oil futures for December delivery settled up $1 at $75.58 a barrel on the New York Mercantile Exchange. Gold futures for December ended down $3 at $1,190.90. an ounce.
President Obama holds a key speech on immigration on Thursday evening.
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On tap this week:
Thursday
Earnings: Gap, Ross Stores, Gamestop, Autodesk, Intuit, Marvell Tech, Mentor Graphics, Renren, Splunk
8:30 p.m.: San Francisco Fed President John Williams
Friday
Earnings: Foot Locker, Ann
—Reuters and CNBC's Patti Domm contributed to this report.