US STOCKS-Economy, eBay profit lift Wall Street to 5-year high

Thu Jan 17, 2013 12:11pm EST

* Jobless claims fall, housing starts accelerate

* EBay gains after results beat expectations

* Bank of America, Citigroup results weigh on financials

* Indexes up: S&P 0.5 pct, Dow 0.5 pct, Nasdaq 0.6 pct

By Chuck Mikolajczak

NEW YORK, Jan 17 (Reuters) - Wall Street rose on Thursday, with the S&P 500 hitting a five-year intraday high, on improved housing and jobs data as well as better-than-expected results from online marketplace eBay.

The data showed the number of Americans filing new claims for unemployment benefits fell to a five-year low last week, while groundbreaking for homes rose to the fastest pace in four years last month.

Strength in the housing and labor markets is key to sustained growth and higher corporate profits. Job market improvement helps boost consumer spending while a recovery in housing means more purchases of appliances, furniture and other household goods as well as a source of employment.

"The unemployment claims were nice, the housing starts were nice, so that is positive for us. There are some good positive vibes out there," said Harry Clark, chief executive of Clark Capital Management Group in Philadelphia.

The Dow Jones industrial average gained 69.83 points, or 0.52 percent, to 13,581.06. The Standard & Poor's 500 Index added 7.31 points, or 0.50 percent, to 1,479.94. The Nasdaq Composite Index rose 17.74 points, or 0.57 percent, to 3,135.29.

PulteGroup Inc shares gained 2.4 percent to $19.81 and Toll Brothers Inc advanced 1.9 percent to $35.56. The PHLX housing sector index climbed 1.5 percent.

EBay's shares rose 3 percent to $54.51 a day after it reported holiday quarter results that just beat Wall Street expectations. It gave a 2013 forecast that was within analysts' estimates.

The S&P is on track for its third consecutive advance, which pushed the index above an intraday peak set in September to its highest since December 2007.

But gains were tempered by weakness in the financial sector, with Bank of America down 3.4 percent to $11.38 and Citigroup off 2.8 percent to $41.29 after they posted their results.

Bank of America's fourth-quarter profit fell as it took more charges to clean up mortgage-related problems. Citigroup posted $2.32 billion of charges for layoffs and lawsuits, while its new chief executive cautioned the bank needed more time to deal with its problems.

The S&P financial sector index slipped 0.06 percent as the only one of the 10 major S&P sectors to decline.

S&P 500 corporate earnings for the fourth quarter are expected to rise 2.3 percent, Thomson Reuters data showed. Expectations for the quarter have fallen considerably since October when a 9.9 percent gain was estimated.

With investors anticipating the current earnings season to be lackluster, their focus will be on the corporate earnings outlook for the months ahead, analysts said.

Shares of Boeing extended recent declines after the United States and other countries grounded the company's new 787 Dreamliner after a second incident involving battery failure. Boeing slipped 0.8 percent to $73.77 and is down 1.7 percent for the week so far.