FEBRUARY 16, 2012, 4:46 P.M. ET.

Dow Closes at Highest Level in 4 Years

By CHRIS DIETERICH

The Dow Jones Industrial Average rebounded to end with its highest close in almost four years after strong readings from the labor and housing markets, and progress in Europe toward a second bailout for Greece.

The Dow Jones Industrial Average advanced 123.13 points, or 1%, to 12904.08. Blue chips recovered after falling 97 points on Wednesday, the Dow's worst session of the year, ending Thursday with the highest close since May 2008. The Standard & Poor's 500-stock index rose 14.81 points, or 1.1%, to 1358.04, and the Nasdaq Composite rose 44.02 points, or 1.5%, to 2959.85.


U.S. stocks gained after positive news from the labor and housing markets deflected concern about Greece's debt. Steven Russolillo reports on Markets Hub. (Photo: AP)
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All 10 sectors in the S&P 500 rose, with materials and financial stocks leading the advance. Among Dow components, Microsoft gained 4.1% and Bank of America rose 4%.

Stocks moved higher after encouraging U.S. economic data, then extended gains after a report that euro-zone central banks will swap Greek debt for new bonds by Monday, a move that takes away one hurdle standing in the way of a second Greek bailout.

"The mind-set of investors has increasingly moved from Europe being something that could imminently collapse to something that looks more like a chronic problem," said Jim Paulsen, chief investment strategist at Wells Capital Management.


Markets reporter Steven Russolillo makes a stop on Mean Street to note the similarity between the markets today and at this point in 2011. Photo: Reuters.
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The number of U.S. workers applying for unemployment benefits fell last week to the lowest level in nearly four years. The Federal Reserve Bank of Philadelphia reported that an index of business conditions for manufacturers in the mid-Atlantic region rose in February from the month before, slightly better than expectations. Moreover, housing starts increased more than expected last month, and issuance of building permits for housing increased in January, in line with expectations.

"There's more optimism again because the data surprised to the upside, and in the most significant areas of concern, labor and housing," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

In corporate news, General Motors rose 9% after the auto maker reported a record profit of $7.6 billion for 2011, but saw losses in Europe and thin profit margins in the fourth quarter.

Clearwire's fourth-quarter loss widened as the company's interest expenses rose, though its subscriber base continued to expand. Shares slid 4.7%.

NetApp tacked on 7.2% and led the S&P 500 despite reporting fiscal third-quarter earnings fell 36% on higher charges and weaker margins. The data-storage company posted double-digit-percentage sales growth.

J.M. Smucker slid 8.4%, making it the S&P 500's biggest laggard, after the company reported weaker-than-expected fiscal third-quarter results and cut its full-year earnings outlook.

Blue Nile tumbled 10%. The online jewelry retailer reported disappointing fourth-quarter earnings and revenue, and indicated its results for the current quarter will fall short of expectations.

Amazon.com fell 2.5% after analysts at Morgan Stanley trimmed the stock's rating to "equalweight" from "overweight," warning that Apple's iPhones and iPads sales could take away market share in electronic books. The stock fell even after a report from IHS showed Amazon's Kindle fire and other low-price tablets cut into Apple's market share in the fourth quarter.

Paccar rose 4.9% after the chief executive of Swedish truck maker Scania said the European truck market has bottomed out. Europe's truck market has been weighing on Paccar because its DAF truck brand is a major player in the European market.

Molson Coors Brewing's fourth-quarter earnings climbed 58% amid stronger-than-expected sales growth; shares rose 2.9%.

Dow Closes at Highest Level in 4 Years - WSJ.com