Jump in home sales boosts Dow

NEW YORK (AP) — Investors celebrated news of another jump in home sales by propelling the Dow Jones industrials to their first close above 9,000 since January.

Better-than-expected profits at some of the nation’s biggest companies also lifted the market, giving the Dow a 188-point rally to finish at its highest level since November.

The Dow’s gain was the latest jump — and not even the biggest — in a surge that has lifted the index 923 points, or 11 percent, in only nine days as hopes grow about an economic recovery.

The latest climb followed a report that sales of previously occupied homes rose for the third month in a row in June. Unemployment and a weak housing market have been two of investors’ biggest worries, so any sign of improvement is big news for the economy.

The National Association of Realtors said sales of previously occupied homes rose 3.6 percent in June. Sales came in at 4.89 million, above the 4.84 million analysts had been expecting.

Another batch of corporate profit reports also helped boost the market. Ford Motor Co. surprised investors with a profit of $2.3 billion, due mainly to a huge gain for debt reduction, while manufacturing conglomerate 3M Co. and candy maker Hershey Co. raised their profit forecasts for the year.

After a month of wayward trading, stocks began climbing again at the start of last week as companies like Goldman Sachs Group Inc. and Intel Corp. posted robust earnings.

“I don’t think the market is signaling that we are fully healed at all, but it is telling us that there is a strong likelihood that a recovery is under way,” said Ciaran O’Kelly, head of equities, Americas, at Nomura Securities Intl. Inc. in New York.

According to preliminary calculations, the Dow rose 188.03, or 2.1 percent, to 9,069.29. It was the highest finish for the blue chips since Nov. 5 and the first time the Dow has traded or closed above 9,000 since January. Even with the gains, the Dow is still far off its peak of 14,165 in October 2007.

The Standard & Poor’s 500 index rose 22.22, or 2.3 percent, to 976.29. It hasn’t traded or closed above 1,000 since early November.

The Nasdaq composite index rose 47.22, or 2.5 percent, to 1,973.60, its 12th straight advance. The Nasdaq hasn’t had a rally that long since a streak that ended Jan. 8, 1992.

About five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.4 billion shares, compared with 1.1 billion Wednesday.

Analysts caution that volume remains relatively light, as is typical of the summer months when many traders take vacations. It’s easier for the market to make big swings when there are fewer trades.

Bond prices tumbled, pushing their yields higher, as money flowed back into the stock market and out of safe-haven investments. The yield on the benchmark 10-year Treasury note, which is closely tied to home mortgage rates, jumped to 3.67 percent from 3.55 percent late Wednesday.

In downturns in the past 60 years, the S&P 500 index has hit bottom an average of four months before a recession ended and about nine months before unemployment reached its peak.

Dealmaking also supported stocks. Investors look to companies’ willingness to make acquisitions — and part with cash or take on debt — as a sign of confidence.

Bristol-Myers Squibb Co. said it plans to acquire Medarex Inc. for about $2.1 billion, the latest in a string of acquisitions by the drug maker. Medarex surged $7.49, or 89 percent, to $15.89, while Bristol-Myers rose 57 cents, or 2.8 percent, to $20.86.

Amazon.com Inc. agreed to buy Zappos.com Inc., a privately held online shoe store, in a deal worth about $850 million. Amazon rose $5.08, or 5.7 percent, to $93.87.