Wall Street climbs as China data puts S&P back at five-year high

NEW YORK Fri Jan 11, 2013 4:48am IST

1 of 7. Traders work on the floor of the New York Stock Exchange, January 10, 2013. U.S. stocks rose on Thursday as stronger-than-expected exports in China, the world's second-biggest economy, raised hopes for a more robust recovery in the global economy.

Credit: Reuters/Brendan McDermid

Related Video

Stocks

   

NEW YORK (Reuters) - Stocks rose on Thursday and the S&P 500 ended at a fresh five-year high as stronger-than-expected exports from China spurred optimism about global growth prospects.

Buying accelerated late in the day after the S&P 500 broke through technical resistance at 1,466.47, which was the market's closing level last Friday and the highest level since December 2007.

"Historically, January is a positive month for the market and you're seeing that play out," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

Financial and energy stocks were the day's top gainers. The financial sector index .GSPF rose 1.4 percent and the energy sector .GSPE was up 1 percent.

Analysts cited economic data out of China as the day's catalyst, which showed the country's export growth rebounded sharply to a seven-month high in December, a strong finish to the year after seven straight quarters of slowdown.

"It is being interpreted positively that they've stopped the downturn (in growth)," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.

"If they continue to produce good growth, that's going to be supportive of our global manufacturers."

Wall Street's fear gauge, the CBOE Volatility Index .VIX suggested markets were relatively calm. The VIX was down 2.3 percent at 13.49.

At Thursday's close, the S&P sits about 6 percent below its all-time closing high of 1,565.15, hit in October 2007.

The Dow Jones industrial average .DJI gained 80.71 points, or 0.60 percent, to 13,471.22. The Standard & Poor's 500 Index .SPX rose 11.10 points, or 0.76 percent, to 1,472.12. The Nasdaq Composite Index .IXIC added 15.95 points, or 0.51 percent, to 3,121.76.

Thursday's session had earlier included a dip that traders said was triggered by a trade in the options market that prompted a large amount of S&P futures to hit the market at the same time. That sent the S&P 500 index down rapidly but those losses were reversed through the afternoon.

Financials benefited from events this week that added clarity to mortgage rules and banks' potential exposure to the housing market.

The U.S. government's consumer finance watchdog announced mortgage rules on Thursday that will force banks to use new criteria to determine whether a borrower can repay a home loan.

Earlier this week, several big mortgage lenders reached a deal with regulators to end a review of foreclosures mandated by the government.

"It's a resolution. It's not hanging over their heads," said Brunner.

Bank of America (BAC.N) gained 3.1 percent to $11.78, while Morgan Stanley (MS.N) was up 3.7 percent at $20.34, one day after sources said the bank plans to cut jobs.

Shares of upscale jeweler Tiffany (TIF.N) dropped 4.5 percent to $60.40 after it said sales were flat during the holidays.

Herbalife Ltd (HLF.N) stepped up its defense against activist investor Bill Ackman, stressing it was a legitimate company with a mission to improve nutrition and help public health. The stock ended down 1.8 percent at $39.24 after a volatile day.

After the closing bell, American Express (AXP.N) said it would cut about 5,400 jobs, and take about $600 million in after-tax charges in the fourth quarter. The stock added 0.7 percent to $61.20 in after-hours trade.

Volume was above the 2012 average of 6.42 billion shares traded a day, with roughly 6.77 billion shares changing hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT.

Advancers outnumbered decliners on the NYSE by 1,916 to 1,039, while advancers also outpaced decliners on the Nasdaq by 1,439 to 1,036.

(Editing by Nick Zieminski)

Economic Pulse

REUTERS SHOWCASE

Banking Sector

Banking Sector

India's laggard state lenders face tough sell on capital raising plan  Full Article 

Trade Deal

Trade Deal

WTO postpones trade deal by a day after last-minute objection.  Full Article 

Falling Oil Prices

Falling Oil Prices

Saudis signal no push for oil cut as market to "stabilise itself"  Full Article 

Raising Stake

Raising Stake

Nippon Life to raise stake in Reliance Capital fund unit  Full Article 

Sterilisation Camps

Sterilisation Camps

Sterilisation targets remain in all but name, critics say  Full Article 

Share Buyback

Share Buyback

Samsung Electronics to buy back $2 billion in shares  Full Article 

Bird Flu Scare

Bird Flu Scare

India orders culling after bird flu outbreaks in Kerala.  Full Article 

Microsoft in China

Microsoft in China

Microsoft to pay China $140 million for 'tax evasion'   Full Article 

Flashback: 26/11

Flashback: 26/11

The three-day attack in November 2008 left 166 dead.  Slideshow 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage