US stocks rose for a third day to further pare their December decline, with energy shares leading amid a rally in crude oil.
The Standard & Poor’s 500 Index rose 0.7 percent to 2,053.85 at 10:04 a.m. in New York, after rising 1.7 percent during the prior two sessions. The Dow Jones Industrial Average climbed 120.74 points, or 0.7 percent, to 17,538.01. The Nasdaq Composite Index added 0.7 percent. Trading in S&P 500 shares was 14 percent lower than the 30-day average at this time of day.
US exchanges will close early on Thursday for the Christmas holiday and reopen on Dec. 28.
“The gains in oil and materials are certainly helping the market dig itself out of the hole,” said Peter Jankovskis, co- chief investment officer of Lisle, Illinois-based OakBrook Investments LLC. “Consumer spending looks good, and it bodes well for the economy.”
Equities rose on Tuesday after data showed consumers’ willingness to spend is bolstering growth, while commodity shares rallied amid optimism that the economy is strong enough to cope with higher borrowing costs.
A report today showed an increase in consumer purchases in November was accompanied by rising wages and scant inflation, indicating the biggest part of the U.S. economy will continue to underpin growth. Separate data showed orders for U.S. capital goods dropped in November for the first time in three months, showing businesses began tempering new investment after a third- quarter surge.
The consumer spending data is the latest evidence that the economy is sturdy enough to weather tighter monetary policy from the Federal Reserve. Purchases climbed by the most in three months in November, which follows a report yesterday showing consumer spending bolstered the economy in the third quarter.
Data today also showed new homes sold at a slower pace than projected in November, a sign momentum in housing is cooling as the year draws to a close. Sales rose 4.3 percent to a 490,000 annualized pace following a 470,000 rate in October, Commerce Department figures showed. The median estimate of economists surveyed by Bloomberg called for a 505,000 pace, and purchases in the prior three months were revised lower.
Another report showed consumer confidence ended the year on a brighter note as low prices put consumers in the holiday spirit. The University of Michigan said Wednesday that its final sentiment index for the month climbed to 92.6, the highest since July.
The S&P 500 historically rises in December, but the so- called Santa rally is under pressure this year, with the benchmark down 1.4 percent this month. The index is on track for its worst final month in 13 years and first annual decline since 2008.
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