Year Ends Up!

Year Ends Up!

Stock market closes up 135 points on new-home deals and job growth prospects

Posted: 12/30/2011 01:00:00 AM MST
Updated: 12/30/2011 02:59:32 AM
MST
By Pallavi Gogoi
The Associated Press

 

NEW YORK — Better news on home sales and improved prospects for job growth sent stocks higher on Wall Street on Thursday.

The Dow Jones industrial average rose 136 points, nearly making up its 140-point loss from the day before. The Standard & Poor's 500 edged back into the black for 2011 with one more day of trading left in the year.

The four-week average of unemployment claims fell to a 3 1/2-year low, an indication that hiring could pick up. Also, the number of Americans who signed contracts to buy homes in November rose more than 7 percent to the highest level in a year and a half, according to the National Association of Realtors.

Quincy Krosby, Prudential Financial's market strategist, said the reports were encouraging signals for the economy going into 2012.

"The correlation between jobs and housing has been crystal-clear this year," Krosby said. "Parts of the country where jobs are more plentiful are the ones where the housing market has held up."

Krosby said the correlation has become more pronounced after the real-estate bust, when lenders became reluctant to even consider customers for a mortgage unless they held jobs. She said it's a noticeable trend in many cities nationwide.

The positive housing news sent the stocks of homebuilders sharply higher. Masco soared 8.4 percent, the most in the S&P 500. Pulte Group rose 6 percent, and Lennar gained 4.6 percent.

The Dow closed at 12,287.04, a gain of 135.63 points, or 1.1 percent. For the year, the Dow is up 709 points, or 6 percent.

The S&P 500 rose 13.38 points, or 1.1 percent, to 1,263.02. That's five points above where the index started the year.

The technology-heavy Nasdaq composite rose 23.76 points, or 0.9 percent, to 2,613.74. The index is down 39 points for the year.

Trading was very light as investors get ready to close the books on 2011. Markets are closed Monday in observance of New Year's Day, which falls on Sunday.

The euro went as low as $1.28 against the dollar, its weakest since September 2010. The euro also fell to its lowest against the Japanese yen in a decade.

Investors continued to be worried that Italy's 10-year borrowing rate remains uncomfortably close to 7 percent, a level that economists consider unsustainable. Greece, Ireland and Portugal all had to seek relief from their creditors after their 10-year bond yields rose above 7 percent.



Read more: Stock market closes up 135 points on new-home deals and job growth prospects - The Denver Post http://www.denverpost.com/business/ci_19642995#ixzz1iPN3m6JX
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