S&P closes near four-year high
Stocks rise on positive Cisco earnings and a housing report that points to future growth. Wal-Mart and Facebook shares fall.
NEW YORK — Encouraging earnings from Cisco and hopeful signs in a housing report lifted the stock market Thursday. The gains nudged the Standard & Poor's 500 index near the four-year high it reached earlier this year.
Cisco Systems, the world's largest maker of computer networking equipment, led the 30 stocks in the Dow Jones industrial average, surging 10 percent. Cisco beat profit expectations late Wednesday and raised its quarterly dividend to 14 cents per share from 8 cents. Cisco gained $1.67 to $19.02.
Before the market opened Thursday, the Commerce Department reported that construction of single-family homes and apartments dipped 1.1 percent in July compared with June.
But market analysts seized on another number: Building permits jumped to 812,000, the most since August 2008 and a hint of stronger construction in coming months.
"I think the housing numbers really got investors' attention," said Tim Speiss, chairman of the personal wealth advisers practice at EisnerAmper.
"Presumably, ground is going to get broken. Houses are going to get built," he said. "It feeds other parts of the economy. A house isn't just sticks and bricks. It's everything else that goes into building a house."
The report helped push the S&P and Dow near their highest closing levels since 2007.
The Standard & Poor's 500 index gained 9.98 points to close at 1,415.51, less than four points shy of its April 2 high. The Dow rose 85.33 points to 13,250.11, an increase of 0.6 percent and 29 points away from its May 1 peak of 13,279.
Wal-Mart Stores trailed other Dow stocks. The world's largest retail chain sank 3 percent after it posted quarterly net income and sales that fell short of what analysts had predicted. Its stock lost $2.30 to $72.15.
In other trading, the Nasdaq composite index rose 31.46 points to 3,062.39.
Facebook fell 6 percent on the first day that its early investors and a handful of founders were free to sell theirstock. In all, 271 million shares can be sold, according to Facebook's regulatory filings. The social networking company lost $1.33 to $19.87.
The S&P 500 has rallied more than 5 percent in the last three weeks, with the bulk of the gains made on a few days in late July and early August. The first jolt was a pledge to protect the euro currency by the head of the European Central Bank, the second a report that showed stronger-than-expected U.S. hiring last month.
Steve Wood, chief market strategist for Russell Investments, said the stock market may simply tread water until the end of the month, when Federal Reserve Chairman Ben Bernanke gives a speech at Jackson Hole, Wyo. Investors expect Bernanke's speech will clarify whether the Fed plans to take additional steps to help the economy.
Markets often languish in August. Fewer shares are traded in late summer as trading desks remain short-staffed until people return from vacation after the Labor Day holiday. Without any major economic news, trading volume usually dries up and stock indexes appear sluggish, as if stuck in their beach chairs.
On Thursday, about 3.1 billion shares were traded on the New York Stock Exchange. Three months ago, daily trading volume on the NYSE averaged 3.8 billion.
The housing report also helped push the price of crude oil up $1.27 per barrel to $95.60 in New York. It has risen almost 3 percent in less than a week.
Among other stocks making big moves Thursday:
— Agilent Technologies slid 8 percent, the worst drop in the S&P 500. Agilent said a slump in global demand for its high-tech measuring products helped tug net income down 26 percent. Its stock lost $3.33 to $37.15.
— PetSmart Inc. climbed nearly 5 percent after the pet products store posted better earnings than analysts' forecasts. PetSmart's quarterly net income rose 28 percent, and it raised its annual profit forecast for the second time this year. The company's stock added $3.09 to $70.53.