Stocks closed at record highs after recovering from an early sell-off Thursday, boosted by positive reports on the U.S. economy and strong earning from big retailers.
The Dow Jones Industrial Average gained 33.27 points, or 0.19 percent, to close at 17,719.00. The S&P 500 index inched up 4.03 points, or 0.20 percent, to close at 2,052.75. Thursday’s action was a continuation of the indices’ record-setting streak in recent weeks.
The NASDAQ Composite Index advanced 26.16 points, or 0.56 percent to close at 4,701.87.
The yield on the benchmark 10-year Treasury note slid to 2.33 percent from 2.36 percent at Wednesday’s close.
Stocks initially fell Thursday on news of ongoing pressures in the European economy, particularly lowered manufacturing activity. But the losses were short-lived as signs of strength in the U.S. economy emerged.
“The major US economic indicators have all beat analyst expectations, attributing to positive economic data and therefore driving the market and overshadowing what’s going on overseas,” said William Lynch, Director of Investments at Hinsdale Associates.
Sales of pre-owned homes unexpectedly increased in October and initial jobless claims decreased for the tenth straight week. The index of leading economic indicators also climbed more than projected for October.
Better-than-expected quarterly earnings releases for Best Buy Co. and Dollar Tree Inc. also gave U.S. equities a lift. Almost 80 percent of the S&P 500 members have reported results that beat analysts’ estimations for the third quarter, according to Bloomberg data.
Retail and consumer discretionary stocks have benefited from failing fuel prices in the past two months, which have increased consumer spending capacity. Crude oil prices rose by $1.00 Thursday to close at $75.58, up from a four-year-low of $74.27 earlier in the month.
“The market is doing quite well, surprisingly, and as long as the Feds keep making it easy to get money with low interest rates, the upturn will continue,” said Bill Hummer, senior vice president and chief Economist at Wayne Hummer Investments.
The Federal Reserve ended its bond-buying stimulus program at its October policy meeting, but has pledged to continue keeping interest rates low for a “considerable” period of time.