Jobless-claims report fuels new record-high market finish

U.S. stocks climbed, extending an all-time high for the Standard & Poor’s 500 Index, as a drop in jobless claims fueled optimism in the economy.

The S&P 500 rose 0.5 percent to 1,842 at 4 p.m. in New York. U.S. markets were closed yesterday for the Christmas holiday.

“The stock market is energized by the stronger macro trends that we’re seeing,” Jim Russell, who helps oversee $112 billion as a senior equity strategist for U.S. Bank Wealth Management, said by phone. “The fundamentals are filling in for a market that has been primarily Fed-driven. We think that is a healthy and sustainable development that has some momentum into 2014.”

U.S. benchmark indexes reached all-time highs in a shortened session on Dec. 24 as data on durable goods and new- home sales beat forecasts. The S&P 500 has gained 29 percent in 2013, poised for its biggest annual jump since 1997.

Jobless claims declined by 42,000 to 338,000 in the week ended Dec. 21, a Labor Department report showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg called for a drop to 345,000. Continuing claims rose.

The year-end holidays make it difficult to adjust for fluctuations in applications for jobless benefits, a Labor Department official said as the figures were released.

Bond Buying

The Federal Reserve, which has made employment creation a determinant factor of its monetary stimulus, on Dec. 18 said it will reduce the pace of bond buying amid faster-than-estimated economic growth. Three rounds of stimulus have sent the S&P 500 up 172 percent from a 12-year low in 2009.

“We are still seeing a bit of window dressing,” Stephane Ekolo, a strategist at Market Securities in London, said by phone. “The U.S. is doing better, the recovery is there. We’ve been playing the tapering news for some time, but the market has come to terms with the fact that it is a minor withdrawal of stimulus, and that in any case it means the economy is doing better. It is a good sign.”

U.S. equities also gained as Japan’s Topix index closed at its highest level since 2008 on speculation the central bank will press ahead with stimulus. The gauge has rallied 49 percent this year, the most among 24 major developed markets tracked by Bloomberg, as Prime Minister Shinzo Abe and the Bank of Japan took steps to end 15 years of deflation.

--With assistance from Alexis Xydias in London. Editors: Jeff Sutherland, Cecile Vannucci

To contact the reporter on this story: Nick Taborek in New York at ntaborekbloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1bloomberg.net; Lynn Thomasson at lthomassonbloomberg.net