March 14 (Bloomberg) -- U.S. stocks climbed, sending the Standard & Poor’s 500 Index toward a record high, as jobless claims unexpectedly dropped last week.
Ryland Group Inc. and PulteGroup Inc. rose at least 3.5 percent, pacing gains among homebuilders. Energy shares rallied, as Chevron Corp. jumped 1.5 percent and WPX Energy Corp. added 4.8 percent. E*Trade Financial Corp. lost 6.8 percent as Citadel LLC plans to sell the rest of its equity stake.
The S&P 500 rose 0.4 percent to 1,561.09 at 12:48 p.m. in New York. The Dow Jones Industrial Average climbed 68.52 points, or 0.5 percent, to 14,523.80, extending its record high and advancing for a 10th straight day. Trading in S&P 500 stocks was 12 percent below the 30-day average at this time of day.
“It’s a little bit more fuel on the fire,” Jeffrey Davis, chief investment officer at Lee Munder Capital Group, said in a phone interview. The Boston-based firm oversees $5 billion. “It’s been a long time since you’ve seen momentum both on the market and technical front being supported by economic fundamentals. In spite of the fact the market’s not as cheap as it once was, it’s looking like the rally should continue.”
The S&P 500 is about five points away from its record closing level of 1,565.15 set in October 2007. The gauge has more than doubled from its bottom in 2009, fueled by corporate earnings that topped estimates and monetary stimulus from the Federal Reserve. The Dow has set record closing highs for seven straight days.
“Hitting a new high is going to send a signal to all of the fence-sitters that maybe it’s time to take a fresh look at equities,” Alan Gayle, senior strategist at RidgeWorth Capital Management, said over the phone. The Richmond, Virginia-based firm oversees about $48 billion. “The U.S. economy is reasserting itself in a leadership role in terms of overall economic momentum. The housing market is showing recovery, so this is all good for wealth. The decline in jobless claims suggests that the job market is continuing to improve.”
The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, fell 3 percent to 11.48, the lowest level since February 2007.
First-time jobless claims fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid-January, according to data today from the Labor Department in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 350,000. The four-week average declined to a five- year low.
A separate report showed wholesale prices in the U.S. climbed in February for a second month, reflecting a jump in energy costs that are now dissipating.
In Europe, stocks advanced to a 4 1/2-year high before the region’s leaders begin a two-day Brussels summit. Euro-area finance ministers meet separately tomorrow to discuss a bailout for Cyprus.
An S&P gauge of homebuilders rose 1.9 percent, as 10 of 11 members advanced. Ryland Group added 3.9 percent to $40, while PulteGroup jumped 3.5 percent to $20.57. Energy producers and telephone companies climbed the most in the S&P 500, rising at least 0.7 percent. Chevron Corp. rose 1.5 percent to a record $120.13 and WPX Energy Inc. surged 4.8 percent to $16.77.
CBS climbed 2.9 percent to its highest level since 2000 at $47.26. The most-watched U.S. television network announced plans to offer a full-episode streaming app for the iPad and iPhone.
LinkedIn Corp. added 0.9 percent to $180.88 as Goldman Sachs Group Inc. raised its price target to $220 from $157. EBay Inc., operator of the world’s largest online marketplace, climbed 3.5 percent to $52.77. Evercore raised its rating on the company to overweight from equalweight.
Apple Inc. rose 1.3 percent to $433.73. BTIG Research analyst Walter Piecyk raised his rating on the company to buy from neutral, citing opportunity from yet to be announced products and expectation Apple will return to per share earnings growth in 2014.
E*Trade Financial fell 6.8 percent, the most in the S&P 500, to $11.02. Citadel, its largest shareholder, said late yesterday that it will sell about 27.4 million shares after E*Trade rejected pressure to find buyers and the stock rallied 32 percent this year.
Citadel asked E*Trade in 2011 to hire a bank to review strategic alternatives and take immediate action to maximize shareholder value after “catastrophic losses” that had driven the shares down 97 percent since 2007.
Smith & Wesson Holding Corp. sank 2.7 percent to $9.26 and Sturm Ruger & Co. dropped 2.8 percent to $54.26. The biggest publicly traded gunmakers in the U.S. retreated after the Senate Judiciary committee approved a measure to ban assault weapons.
Amazon.com Inc. fell 2.1 percent to $269.45 after JPMorgan Chase & Co. lowered its recommendation on the shares to neutral from overweight, saying some of the online retailer’s key business lines indicate more material deceleration in 2013 gross profit.
--With assistance from Sarah Jones in London. Editor: Jeff Sutherland