Stock markets rallied on Thursday as positive economic data on jobs and housing outweighed concerns about the European economy. The Dow Jones industrial average finished within sight of 13,000 points to close at its highest point since the 2008 financial crisis.
The blue-chip index rose 46.24 points, or 0.4%, to 12,984.91. The Standard & Poor's 500 index rose 5.8 points, or 0.43%, to 1,363.46. The technology-heavy Nasdaq composite index rose 23.81 points, or 0.8%, to 2,956.98.
"The economic data coming out has had a decidedly positive spin to it," said Jeff Saut, chief investment strategist at Raymond James. "Even employment numbers are turning. Housing is getting better. If you’re sitting on too much cash, the market is running away from you."
The U.S. labor market showed unexpected strength as the number of people making new claims for unemployment benefits remained at the lowest level since March 2008 for the second straight week. A report from the Federal Housing Finance Agency showed an average increase in home prices nationwide of 0.7%, surpassing estimates by analysts polled by Bloomberg.
European shares fell overnight after the European Union changed growth forecasts to predict that the 17-nation economy will contract in 2012 at a rate of 0.3%. Greece leads the decline with an economy that is projected to shrink 4.4% this year, while Italy and Spain are expected to contract by 1.3% and 1%, respectively.
Four major European banks reported losses Wednesday related to the Greek debt crisis. The Royal Bank of Scotland, majority-owned by the British government, announced an unexpectedly large $3.2-billion loss in 2011. Commerzbank, Credit Agricole and Dexia also reported major losses.
In New York trading, IBM gained 1.9%, accounting for an additional 30 points on the Dow due to the company's large share-price influence on the index. Shares of Sears Holding soared 18.7% after the company announced plans to pay down debt and raise money by selling 11 store sites. Hewlett-Packard fell 6.4% in early trading after the company disappointed with its earnings announcement.