Stock prices rallied in a holiday-shortened session Thursday and the major market indexes closed at their highest levels for 2009.
The Dow Jones industrial average gained 53.66 points to 10,520.10. The Nasdaq composite index rose 16.05 points to 2,285.69 and the S&P 500 stock index was up 5.89 points to 1,126.48.
Once again, the Nasdaq led the way for the week, gaining 3.4 percent. The S&P 500 added 2.2 percent and the Dow rose 1.9 percent.
The rally was sparked by news that initial claims for jobless benefits fell in the past week by 28,000 to 452,000, the lowest level in 15 months.
Commodities also moved higher Thursday. Gold gained $10.80 to $1,104.10 an ounce. Oil gained 72 cents to $77.39 a barrel.
Stocks advanced Wednesday as rallies in oil and copper drove gains in commodity producers. The S&P 500 has recouped half the losses following its plunge from an October 2007 peak, a sign to technical analysts that the index may gain 9.4 percent to 1,226. The so-called 50 percent retracement above 1,120.84 suggests the index is likely to regain 61.8 percent of losses since its peak, according to Fibonacci analysis.
The bear market between October 2007 and March 9, 2009, drove the S&P 500 down 57 percent to 676.53. The index reached an all-time high of 1,565.15 two years ago.
The S&P 500 has climbed 25 percent this year, poised for the biggest annual gain since 2003. Equities have been buoyed by record-low interest rates and by governments worldwide that have committed about $12 trillion to revive the economy.
Economic growth in the United States is accelerating even more than previously anticipated as business investment picks up and stockpiles fall at a slower pace, according to economists at Morgan Stanley (NYSE: MS) in New York. The economy is poised to grow at a 5.1 percent annual rate from October through December, according to a revised forecast by Morgan Stanley following the Commerce Department’s report on durable goods. The new estimate is a percentage point higher than their earlier projection.
“Growth in the fourth quarter and first quarter of 2010 will be particularly strong because inventories will correct to the upside,” said Philip Gijsels, a senior structured-equity strategist at Fortis Global markets in Brussels, in a Bloomberg Television interview. Government stimulus measures will also still support the economy in that period, he said.
Technology shares rose 1 percent for the biggest gain among 10 industries in the S&P 500.
Apple Inc. (Nasdaq: AAPL) advanced 3.4 percent to $209.04. The maker of iPods and iPhones said Wednesday it will hold its shareholders’ meeting on Feb. 25, according to a filing with the U.S. Securities and Exchange Commission.
SanDisk Corp. (Nasdaq: SNDK), the world’s largest maker of flash-memory cards used in digital cameras, had the steepest gain in the S&P 500, adding 6.6 percent to $30.13.
Shares of raw-materials producers had the third-biggest gain among 10 industries, rising 0.8 percent. The dollar fell for a second day against a basket of six major currencies, boosting the appeal of commodities.
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), the biggest publicly traded copper producer, added 1.1 percent to $81.81. Exxon Mobil Corp. (NYSE: XOM), the world’s biggest energy company, gained 0.6 percent to $68.66.
Boeing (NYSE: BA) rose 1 percent to $55.48. The Chicago-based company received orders for 46 planes in the past week, including 11 for the 787 Dreamliner. Total net orders this year amount to 141, Boeing said Thursday on its Web site. The majority of orders for the week ended Wednesday came from unidentified customers who placed requests for 35 planes.
YRC Worldwide Inc. (Nasdaq: YRCW) surged 7.3 percent to $1.02. Bondholders increased support for a debt exchange designed to avert bankruptcy even as the largest U.S. trucking company extended the deadline because participation remained below a required threshold.
Oshkosh Corp. (NYSE: OSK) jumped 2.3 percent to $38.24. The maker of military trucks received a U.S. Army order valued at about $54 million to supply more than 970 add-on protection kits for the MRAP All-Terrain Vehicle.
Investors should buy “good stocks” in 2010 as the rally in equities continues in spite of skepticism that it will last, Laszlo Birinyi said.
“I see a basic continuation of what we have seen for the last nine months,” Birinyi, the founder of Westport, Conn.-based research and money-management firm Birinyi Associates Inc., said Thursday in a Bloomberg Television interview. “There’s going to be a drift back to stocks because people are realizing alternatives aren’t happening and the negative case isn’t all that compelling.”
Bloomberg News contributed to this report.
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