NEW YORK Stocks rose on Thursday and the S&P 500 ended at a fresh five-year high as stronger-than-expected exports from China spurred optimism about global growth prospects.
Buying accelerated late in the day after the S&P 500 broke through technical resistance at 1,466.47, which was the market's closing level last Friday and the highest level since December 2007.
"Historically, January is a positive month for the market and you're seeing that play out," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
Financial and energy stocks were the day's top gainers. The financial sector index .GSPF rose 1.4 percent and the energy sector .GSPE was up 1 percent.
Analysts cited economic data out of China as the day's catalyst, which showed the country's export growth rebounded sharply to a seven-month high in December, a strong finish to the year after seven straight quarters of slowdown.
"It is being interpreted positively that they've stopped the downturn (in growth)," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
"If they continue to produce good growth, that's going to be supportive of our global manufacturers."
Wall Street's fear gauge, the CBOE Volatility Index .VIX suggested markets were relatively calm. The VIX was down 2.3 percent at 13.49.
At Thursday's close, the S&P sits about 6 percent below its all-time closing high of 1,565.15, hit in October 2007.
The Dow Jones industrial average .DJI gained 80.71 points, or 0.60 percent, to 13,471.22. The Standard & Poor's 500 Index .SPX rose 11.10 points, or 0.76 percent, to 1,472.12. The Nasdaq Composite Index .IXIC added 15.95 points, or 0.51 percent, to 3,121.76.
Thursday's session had earlier included a dip that traders said was triggered by a trade in the options market that prompted a large amount of S&P futures to hit the market at the same time. That sent the S&P 500 index down rapidly but those losses were reversed through the afternoon.
Financials benefited from events this week that added clarity to mortgage rules and banks' potential exposure to the housing market.
The U.S. government's consumer finance watchdog announced mortgage rules on Thursday that will force banks to use new criteria to determine whether a borrower can repay a home loan.
Earlier this week, several big mortgage lenders reached a deal with regulators to end a review of foreclosures mandated by the government.
"It's a resolution. It's not hanging over their heads," said Brunner.
Bank of America (BAC.N) gained 3.1 percent to $11.78, while Morgan Stanley (MS.N) was up 3.7 percent at $20.34, one day after sources said the bank plans to cut jobs.
Shares of upscale jeweler Tiffany (TIF.N) dropped 4.5 percent to $60.40 after it said sales were flat during the holidays.
Herbalife Ltd (HLF.N) stepped up its defense against activist investor Bill Ackman, stressing it was a legitimate company with a mission to improve nutrition and help public health. The stock ended down 1.8 percent at $39.24 after a volatile day.
After the closing bell, American Express (AXP.N) said it would cut about 5,400 jobs, and take about $600 million in after-tax charges in the fourth quarter. The stock added 0.7 percent to $61.20 in after-hours trade.
Volume was above the 2012 average of 6.42 billion shares traded a day, with roughly 6.77 billion shares changing hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT.
Advancers outnumbered decliners on the NYSE by 1,916 to 1,039, while advancers also outpaced decliners on the Nasdaq by 1,439 to 1,036.
(Editing by Nick Zieminski)