S&P 500 rises to 5-year high on China data

An improving economy in China provided the impetus for a solid move higher in U.S. stock prices Thursday.

The Dow Jones Industrial Average rose 80.71 points to 13,471.22. The Nasdaq Composite Index gained 15.95 points to 3,121.76 and the S&P 500 stock index was up 11.10 points to 1,472.12.

China reported an increase in exports, topping expectations. In addition, initial claims for jobless benefits rose by 4,000 last week to 371,000, the highest level in two months.

The news from China also sent gold prices higher, up $22.50 to $1,678 an ounce. Oil rose 72 cents to $93.82 a barrel.

“The market is encouraged by evidence of healing on the international front,” said Alan Gayle, senior strategist at RidgeWorth Capital Management in Richmond, Va., which oversees about $47 billion. “In the U.S., the earnings season is just getting started and there’s a lot of things that we don’t know. Investors will still be on that wait-and-see mode.”

Equities followed global shares higher as China’s overseas sales rose 14.1 percent in December from a year earlier, almost triple the 5 percent gain predicted. European Central Bank President Mario Draghi said the euro-area economy will slowly return to health in 2013 as the region’s bond markets stabilize after three years of turmoil.

Ford Motor Co. (NYSE: F) jumped 2.7 percent to $13.83. The second-largest U.S. automaker doubled its dividend to 10 cents per share after record profit margins boosted its cash. Ford, which resumed paying a dividend last year after a five-year hiatus, cited its strengthening business as the reason for boosting the payout.

Supervalu Inc. (NYSE: SVU) climbed 14 percent to $3.47. A Cerberus-led investor group agreed to acquire Supervalu’s Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market grocery stores. Cerberus also will lead a group to conduct a tender offer to buy as much as 30 percent of Supervalu’s common stock for $4 a share in cash, the companies said today in a statement.

DirecTV (NYSE: DTV) jumped 1.1 percent to $52.44. The company is planning to raise $750 million with bonds that may fund share repurchases at the largest U.S. satellite-TV operator, whose stock trades cheaper relative to earnings than its average U.S. competitor.

News Corp. (NYSE: NWSA)

News Corp. gained 2.2 percent to $26.97. The media company run by billionaire Rupert Murdoch was raised to outperform from market perform at Sanford C Bernstein & Co.

Altria Group Inc. (NYSE: MO) rose 2.5 percent to $32.70. The largest seller of tobacco in the U.S. was raised to "buy" from "hold" at Stifel Nicolaus Corp. by equity analyst Christopher Growe. The 12-month share-price estimate is $36.

Tiffany & Co. (NYSE: TIF) slumped 4.5 percent to $60.40. High-income consumers’ confidence waned in the U.S. as the prospect of higher taxes approached, David Schick, an analyst at Stifel Financial Corp., who recommends holding the shares, wrote in a Jan. 7 note.

Investor Concerns

Orbitz Worldwide Inc. (NYSE: OWW) dropped 10 percent to $2.98. The resignation of Chief Financial Officer Mitch Marcus amplified investor concerns about the company’s ability to expand hotel bookings.

Herbalife Ltd. (NYSE: HLF) slipped 1.8 percent to $39.24, reversing an earlier rally of 7.6 percent. Chief Executive Officer Michael Johnson accused hedge fund manager Bill Ackman of “gross mischaracterizations” about the nutrition company’s direct- selling model as Herbalife executives mounted a point-by-point defense for investors.

Ackman said in a statement that Herbalife “distorted, mischaracterized, and outright ignored” major portions of a Dec. 20 presentation accusing Herbalife of using inflated pricing, misleading sales information and a complicated incentive structure to hide a pyramid scheme.

Molycorp Inc. (NYSE: MCP) tumbled 23 percent to $8.34. The owner of the largest rare-earth deposit outside China missed its 2012 output target and said revenue will be lower than forecast this year after the new chief executive officer changed its ramp-up schedule.

Microsoft Corp. (Nasdaq: MSFT) lost 0.9 percent to $26.46. The world’s largest software maker was downgraded to equalweight from overweight at Morgan Stanley.

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