U.S. stocks climbed Thursday after a reading on manufacturing activity hit its highest level in nearly four years and news about Facebook and Tesla drove their shares to record highs.
The major indexes swung between slight gains and losses in early trading but were clearly in the black after noon and didn’t look back. The Standard & Poor’s 500-stock index ended less than 0.5 percent below the record close of 1,848.38 it hit last month.
Factory activity accelerated at its fastest pace in nearly four years in February, according to Markit’s preliminary U.S. Manufacturing Purchasing Managers Index. That was a bullish economic indicator after a string of weaker-than-expected reports.
New claims for unemployment insurance fell in the latest week, boding well for the job market, but the Philadelphia Fed’s gauge of manufacturing activity in its region unexpectedly contracted in February.
The stock market has selectively shrugged off tepid data, pinning recent weakness on the impact of extremely cold weather and massive snow rather than weakening fundamentals.
“The U.S. [Markit] PMI number was probably not as good as it seems. There could be some noise there, but it certainly is a good number,” said Paul Zemsky, head of asset allocation at ING Investment Management in New York. “Overall, I think the data is a little equity-positive. I don’t think this is sufficient to take us past 1,850 [on the S&P 500]. We need a reasonably good jobs number for that.
The Dow Jones industrial average rose 92.67 points, or 0.58 percent, to end at 16,133.23. The S&P 500 gained 11.03 points, or 0.60 percent, to finish at 1,839.78, and the Nasdaq composite index added 29.591 points, or 0.7 percent, to close at 4,267.55.
Social networking giant Facebook said late Wednesday it would buy mobile-messaging start-up WhatsApp for $16 billion in cash and stock. After initially falling on the news, Facebook shares closed up 2.3 percent, at $69.63 after earlier hitting a record high of $70.11.
Tesla shares surged 8.4 percent, to $209.97, after hitting an intraday record of $215.21. The electric car maker reported fourth-quarter results that topped expectations and said deliveries of its luxury sedan would surge more than 55 percent this year.
Mortgage rates wandered upward last week, according to data released Thursday by Freddie Mac.
The 30-year fixed-rate average edged up to 4.33 percent. It was 4.28 percent a week ago and 3.56 percent a year ago. The 30-year fixed rate went up for the second week in a row after falling for five straight weeks. It has remained below 4.5 percent since early January.
The 15-year fixed-rate average grew to 3.35 percent, up from 3.33 percent a week ago and 2.77 percent a year ago. The 15-year fixed rate has stayed below 3.5 percent for six weeks.
Hybrid adjustable-rate mortgages also gained. The five-year ARM average rose to 3.08 percent. The average was 3.05 percent a week ago and 2.64 percent a year ago.
“Mortgage rates crept up further following the uptick in the 10-year Treasury yield as minutes of the Federal Reserve’s last meeting indicated little possibility of a pause in the central bank’s reduction of bond purchases,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Meanwhile, mortgage applications fell 4.1 percent last week, shows the latest data from the Mortgage Bankers Association.
— Kathy Orton
● India should prepare a plan to respond to volatility in global currency markets that may come as the U.S. Federal Reserve reduces monetary stimulus, the International Monetary Fund’s staff said in a report. While India’s finances have improved since last year, a coordinated plan is needed in case capital account pressures reemerge, the IMF said. Any plan should make rupee flexibility the key defense and include measures to raise the benchmark interest rate, impose cash curbs, open foreign-exchange swap windows and raise diesel prices, the organization said.
● The blueprint for Detroit’s restructuring in its historic bankruptcy is expected to be filed Friday, according to a spokesman for state-appointed emergency manager Kevyn Orr. The long-awaited plan will spell out how pensioners, retirees, banks, bond insurers and other creditors will be treated as Orr’s team reduces Detroit’s $18 billion debt load. Bankruptcy Judge Steven Rhodes set a March 1 deadline for the filing. Orr had hoped to have the plan ready before January, but its release was delayed by negotiations with creditors.
● Two senior officials at
JPMorgan Chase and predecessor companies repeatedly confronted Bernard Madoff over irregularities in his business, a new lawsuit said, suggesting that bank leaders had “direct knowledge” of his Ponzi scheme. The suit, filed Wednesday in federal court in Manhattan on behalf of shareholders, says that “JPMorgan was uniquely positioned for 20 years to see Madoff’s crimes and put a stop to them. But faced with the prospect of shutting down Madoff’s account and losing lucrative profits, JPMorgan . . . chose to turn a blind eye.” The suit names CEO Jamie Dimon and 12 other current and former executives as defendants.
JPMorgan spokeswoman Tasha Pelio declined to comment.
● Vice President Biden says proper job training can remove obstacles that have narrowed the middle class for the past 20 years. Biden met with Cabinet officials Thursday to talk about job training programs, part of an effort by President Obama to take action on initiatives without going through Congress. “It’s about a lot more than jobs,” Biden said. “It’s about opening it up and removing obstacles just for being able to grow the economy and middle class.”
● Business Wire, a firm that publishes and distributes corporate earnings and other news releases, will stop providing its service to high-frequency trading firms. The decision comes after an article in the Wall Street Journal highlighted the advantage that high-frequency trading firms had gained by getting the information directly from Business Wire, rather than accessing it through the financial news wires, such as ThomsonReuters, Dow Jones and Bloomberg.
— From news services
● 10 a.m.: Existing home sales report released.●
● ● Earnings: Dish Network, Graham Holdings.