Live

Watch CBSN Live

Good jobs report, business optimism push Dow, S&P higher

(Moneywatch) A slew of recent reports show continuing improvement in the U.S. economy. There was good news about housing, manufacturing and jobless claims as well as increased optimism among business managers. All this came as the S&P broke 1,500 today, for the first time since 2007.

Two surveys showed that business optimism in December has continued into January. The Conference Board said its index of leading indicators rose 0.5 percent in last month, its best showing since September. In November, the index was unchanged. The gauge is designed to anticipate economic conditions three to six months out.

Also a preliminary survey of purchasing managers showed they expect  businesses to continue expanding. The January Purchasing Managers Index  for manufacturing by the financial information firm Markit rose to 56.1 this month. This is its best showing in nearly three years. A reading above 50 indicates expansion.

"The rate of output growth quickened for the fourth month running, with the latest increase the strongest since last March," according to the report. "Companies attributed faster output growth to an increase in new orders. Overall incoming new work rose at the fastest rate since May 2010, largely reflecting higher demand in the domestic market."

The number of Americans seeking unemployment aid fell last week to the lowest level in five years, evidence that employers are cutting fewer jobs and may step up hiring. The Labor Department said Thursday that weekly unemployment benefit applications dropped 5,000 to a seasonally adjusted 330,000. That's the fewest since January 2008.

The four-week average, a less volatile measure, fell to 351,750. That's also the lowest in nearly five years.

The decline may reflect the government's difficulty adjusting its numbers to account for layoffs after the holiday shopping season. Layoffs spike in the second week of January and then plummet. The department seeks to adjust for those seasonal trends, but the figures can still be volatile.

Inventories of previously owned homes dropped to an 11-year low in December, according to The National Association Realtors. Record low mortgage rates and a desire to buy housing while prices are still down appear to be behind the increase in sales during what is usually an off month for housing.

The number of existing homes available for sale last month fell 8.5 percent to 1.82 million- the fewest since January 2001. At the current sales pace it would take 4.4 months to sell all the houses currently on the market. This is the lowest since May 2005 when it was 4.3 months. 

The unexpectedly strong U.S. data helped stocks to rise today after early declines caused by disappointing revenues reported by Apple. The Standard & Poor's 500 Index was briefly above 1,500 before dropping slightly to 1,494 in midday trading. The Dow Jones Industrial Average was up 55 points at 13,831 in late trading. The Nasdaq Composite, hurt by plunging shares in Apple, was down 20 points at 3,133.

The Associated Press contributed to this report