(Bloomberg News) Most U.S. stocks rose, giving the Standard & Poor's 500 Index its longest rally since March, as data showing an unexpected decline in jobless claims last week tempered concern about a worsening of Europe's economy.
A measure of homebuilders in S&P indexes advanced 2.3 percent as JPMorgan Chase & Co. said it saw higher demand in the industry and data showed prices for single-family homes rose in most U.S. cities last quarter. E*Trade Financial Corp. increased 6.9 percent as Chief Executive Officer Steven J. Freiberg was ousted from the brokerage. Monster Beverage Corp. declined 9.7 percent after profit and sales trailed estimates.
Five stocks rose for every four falling on U.S. exchanges at 4 p.m. New York time. The S&P 500 added less than 0.1 percent to 1,402.80, rallying 2.8 percent in five days. The Dow Jones Industrial Average lost 10.45 points, or 0.1 percent, to 13,165.19. Volume for exchange-listed stocks in the U.S. was 5.5 billion shares, 18 percent below the three-month average.
"We acknowledge the positive news," Wayne Lin, a money manager at Baltimore-based Legg Mason Inc., said in a telephone interview. His firm oversees $631.8 billion. "We've had some positive surprises on the jobs front and it seems that housing has found some footing. Yet people are aware of the risks. The risk in Europe is still out there."
Labor Department data showing fewer firings signaled employers are seeing enough demand to retain staff, indicating the economy is sustaining the recovery. Stocks erased gains earlier after the Wall Street Journal reported that former European Central Bank official Otmar Issing said it was wrong to expect the ECB to buy government bonds to ease the region's debt crisis. Economists surveyed by the ECB predicted the region's contraction this year will be worse than previously forecast.
A five-day rally has taken the S&P 500 up almost 10 percent from a five-month low on June 1. About 72 percent of S&P 500 companies which reported second-quarter results so far have beaten analysts' earnings estimates, according to data compiled by Bloomberg.
"It's kind of blah," said Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. "Growth is slowing in other parts of the world. It will take time. In addition, we've had a strong move up in stocks. It may be people just getting tired."
All 11 stocks in a measure of homebuilders in S&P indexes gained. Data from the National Association of Realtors showed that values nationally jumped the most since 2006 as real estate markets stabilized.
PulteGroup Inc., the largest U.S. homebuilder by revenue, jumped 4.8 percent to $12.67 after being raised to overweight at JPMorgan. KB Home added 6.3 percent to $10.74, while Beazer Homes USA Inc. rallied 4.5 percent to $2.79 after the two companies were also raised at JPMorgan.
E*Trade added 6.9 percent to $8.57. Chairman Frank J. Petrilli will serve as interim CEO while the company seeks a new leader, the company said today in a statement. A board committee which includes the head of its biggest shareholder, Citadel LLC's CEO Ken Griffin, will lead the search for a new chief executive, the company said.
Cisco Systems Inc. rose 3.2 percent to $17.70 after the biggest maker of computer-networking equipment was added to the "Conviction Buy" list at Goldman Sachs Group Inc. Piper Jaffray Cos. also raised its recommendation for the technology company today.