By Victor Reklaitis and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch)--U.S. stocks advanced Thursday afternoon,
as the S&P 500 worked for a fourth straight day of gains and
stayed on track for a record close.
Reports on existing-home sales and manufacturing topped
forecasts, and expectations of dovish notes in Friday's speech from
Federal Reserve Chairwoman Janet Yellen also boosted sentiment.
The S&P 500 (SPX) gained 7 points, or 0.4%, to 1,993 after
hitting an intraday record at 1,993.55. The benchmark index is on
pace to finish above its July 24 all-time closing high of 1,987.98.
(Read more: Why a new all-time high doesn't mean a crash is due
http://blogs.marketwatch.com/thetell/2014/08/21/no-new-all-time-highs-dont-mean-the-market-is-due-for-a-crash/.)
The Dow Jones Industrial Average (DJI) rose 87 points, or 0.5%,
to 17,066, as the blue-chip index moved back above 17,000 and held
about 0.5% below its July 16 record close. The Nasdaq Composite
(RIXF) rose 5 points, or 0.1%, to 4,531.
Today's market-moving economic data: An August reading for the
Philadelphia Fed index, a manufacturing gauge, came in at 28,
besting forecasts for 18, and a manufacturing gauge from Markit
also jumped. Meanwhile, sales of existing homes rose 2.4% in July
to 5.15 million, above expectations, and initial weekly jobless
claims came in basically in line with forecasts.
Thursday's encouraging economic reports have provided a lift to
U.S. stocks, said Kim Caughey Forrest, a portfolio manager and
senior equity analyst at Fort Pitt Capital Group. The good news
might have been bad news for the stock market, spurring worries the
Fed could pull back sooner from its stimulus efforts, but the
central bank has been offering "soothing words," she told
MarketWatch.
""It looks like regardless of how long the Fed hawks are
talking, the doves are winning at this point," Forrest said.
Investors further shrugged off the Fed minutes released
Wednesday that showed some officials arguing the groundwork should
be laid for raising interest rates sooner than expected. A hike is
hardly imminent.
"It's still unlikely that it's going to be immediate and remains
data dependent," said Brenda Kelly, chief market strategist at IG
Markets, in emailed comments.
High hopes for Jackson Hole: Kelly and other strategists said
not much will hold markets' attention ahead of Friday in Jackson
Hole, Wyo., where Fed chief Yellen and European Central Bank
President Mario Draghi are scheduled to speak.
"Markets are making hay while the sun shines--possibly in a
delusional manner based on previous equity moves in the run-up and
aftermath of the Jackson Hole symposium," Kelly said. "Yellen,
however, is not Bernanke, and she may offer some surprises."
Other strategists are sounding at least slightly cautious in the
short term following the S&P 500's two-week uptrend.
"Despite hints by the FOMC that rate hikes may come sooner than
widely anticipated, the S&P 500 appears to be on a mission to
eclipse the 2,000 level before considering the consequences of an
uncontrolled advance," said Sam Stovall, an equity strategist at
S&P Capital IQ, in emailed comments.
Individual stocks: Hewlett-Packard Co. (HPQ) and Hormel Foods
Corp.(HRL) were the biggest winners in the S&P 500, rising 6.2%
and 4.8%, respectively, after each company posted quarterly profit
that topped expectations. Follow the day's notable stock moves
here.
EBay Inc. (EBAY) was another top performer in the S&P 500,
gaining 4.6% in the wake of speculation it may spin off its PayPal
business.
Shares of retailer Gap Inc. (GPS) shed 0.3% in the lead up to
quarterly earnings after the closing bell. What to look for
Dollar Tree Inc. (DLTR) shares were down 1.3% after reporting
quarterly results and as Family Dollar Stores Inc. (FDO) reaffirmed
its support for Dollar Tree's takeover bid, rejecting a rival offer
from Dollar General Corp. (DG)
Other markets: The Stoxx Europe 600 closed higher as investors
pushed aside a mixed bag of purchasing managers indexes.
Disappointing Chinese manufacturing data weighed on Hong Kong
stocks, with the Hang Seng snapping a four-session winning streak.
Gold(GCZ4) settled lower, continuing to lose ground after the Fed
minutes.
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