By Chris Dieterich
U.S. stocks rose Thursday, carrying the S&P 500 index to an
intraday record high, after several upbeat economic reports.
The S&P 500 added four points, or 0.2%, to 1991 after
hitting a record intraday high of 1992.68 earlier in the session.
The Dow Jones Industrial Average rose 67 points, or 0.4%, to 17045.
The Nasdaq Composite Index slipped two points, or 0.1%, to
4524.
Benchmarks climbed higher shortly after Thursday's opening bell
and coasted into the early afternoon. Stocks have rallied over the
past week, with the S&P 500 on pace for its fourth straight
gain.
Shares of financial firms led the way after Bank of America
Corp. agreed to pay $16.65 billion to settle the government's
accusations it sold flawed mortgage securities in the run up to the
financial crisis. Shares added 1.6%.
Gains followed a report showing that applications for
unemployment benefits fell by 14,000 to 298,000 last week, slightly
more than expected. Separately, sales of previously owned homes
rose in July to their highest level since September.
Markit's "flash" manufacturing purchasing managers index rose to
the highest level since April 2010, while a survey of mid-Atlantic
manufacturers for this month registered its highest reading in more
than two decades.
A steady stream of upbeat economic reports, which rebounded
after a slow start to the year, leaves investors optimistic about
profits of U.S. corporations.
"The ultimate driver of stocks is what companies will earn,"
said Seth Masters, chief investment officer at Bernstein Global
Wealth Management, which oversees $74 billion. "There's nothing
right now that indicates a recession is even on the radar
screen."
Trading volumes have been light during the recent run-up in part
because many investors are focused on the potential for central
bankers to update their views on monetary policy. Federal Reserve
Chairwoman Janet Yellen is slated to give a speech Friday in
Jackson Hole, Wyo. European Central Bank President Mario Draghi is
also due to speak Friday.
Tyler Mordy, president and co-chief investment officer at
Toronto's Hahn Investment Stewards, which manages nearly $500
million in exchange-traded funds, said that the speech from Mr.
Draghi could have the greatest impact on the market.
"There is a greater element of surprise" from the ECB, Mr. Mordy
said. That is because the "policy arsenal" in Europe is broader,
while most expect the Fed to continue to gradually reduce its
stimulus efforts and begin to raise interest rates starting next
year.
Hints about policy from central bankers on Friday could
determine the trajectory of global markets in the weeks ahead, he
said: "The burden of policy resides in the central banks."
On Wednesday, minutes from the July Fed meeting showed that some
officials believe that interest rates should be raised sooner than
the consensus estimates in the market.
European stocks shrugged off some patchy economic data Thursday,
with the Stoxx Europe 600 index up 0.7%. The gains came despite a
sharper-than-expected slowdown in euro-zone business activity.
Asian stocks finished mixed Thursday, with Chinese shares falling
after data showed Chinese manufacturing activity down at a
three-month low. The Hang Seng closed off by 0.7%, while the
Japan's Nikkei added 0.9%.
Gold futures fell 1.5% to $1,276.00 a troy ounce. Crude oil
futures added 1% to $94.40 a barrel. The dollar fell versus the
euro but rose against the yen.
Yields on benchmark 10-year U.S. Treasury notes rose fell to
2.419%, down from 2.426% late on Wednesday.
Hewlett-Packard Co. added 4.3% after the technology company's
third-quarter profit beat analyst estimates late Wednesday. United
Parcel Service rose 0.1% after the company said credit-card data
may have been stolen from 51 UPS Store locations across 24 states.
Hormel Foods rallied 4.7% after the company's earnings jumped 21%,
as the packaged-foods maker reported strong profit gains and higher
sales in its refrigerated-foods and Jennie-O Turkey Store
segments.
Write to Chris Dieterich at chris.dieterich@wsj.com