U.S. stocks advanced but the gains were subdued as investors awaited the Labor Department’s employment report on Friday.Trading was choppy throughout the session and stocks swung between gains and losses as traders held their positions.Pending home sales rose for the fifth moth in a row, signaling some stabilization on the housing front and the overall economy.
The Dow Jones industrial average added 33 points, or 0.4%, to jump to its highest level since November 4; the S&P 500 index gained 3 points, or 0.3% and the tech-heavy Nasdaq composite edged up 3 points, or 0.1%, ending at its highest point since October 1.Both the NASDAQ and S&P500 are holding above key technical levels, maintaining their perches above 2000 and 1000, respectively.
Shares in Caterpillar Inc (NYSE:CAT) surged 6.1% after the firm noted at an analysts’ forum that cost cutting efforts and other initiatives will help it reap in profits in the coming years.The company’s CEO noted hopes of annual earnings of $8 to $10 on sales approaching $60 billion by 2012, should a “normal” global recovery occur.Also helping the late-afternoon gains were financials, with Bank of America (NYSE:BAC) up 2.1%, Wells Fargo (NYSE:WFC) up 2.9%, and Citigroup (NYSE:C) up 2.2%.The sector led the gainers on the S&P 500 index with a 2.1% advance.
On the S&P 500, six industry groups advanced, led by a 2.1% rise in financial shares, followed by a 0.5% rise in industrials, 0.4% in consumer goods, 0.1% in basic materials and consumer services.On the downside, utilities, impacted by worse-than-expected results and downside guidance from PPL (NYSE:PPL), sank 1%, followed by drops in oil and gas (-0.3%), tech (-0.1%), and telecommunications issues, off marginally.
The recent optimism on the Street has sent S&P on a scintillating run of 49% from the March 9 lows.That, however, has raised questions about the market’s ability to sustain its recent gains.Nevertheless, the optimism in not entirely baseless as evidenced by yesterday’s pending home sales, which rose 3.6% in June.And while personal income recorded its largest drop in 4½ years, off 1.3% in June, the pace of consumer spending picked up slightly more than expected with a 0.4% increase on higher spending for nondurable goods.
