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US STOCKS-S&P 500 on path to new closing high; homebuilders lead
May 23, 2014 / 6:40 PM / 3 years ago

US STOCKS-S&P 500 on path to new closing high; homebuilders lead

* HP gains on day after results and job-cut plans

* New home sales rebound; homebuilding stocks rise

* Dow up 0.4 pct; S&P 500 up 0.4 pct; Nasdaq up 0.6 pct (Updates to mid-afternoon)

By Angela Moon

NEW YORK, May 23 (Reuters) - The S&P 500 was on track for a record closing high on Friday, boosted by a better-than-expected reading on the housing market, which gave a lift to homebuilding stocks.

The index was poised to score its fifth daily gain out of the past six sessions and its first weekly advance out of the past three.

A housing index jumped 1.7 percent after Commerce Department data showed that sales of new U.S. single-family homes rose more than expected in April and the supply of houses on the market hit a 3-1/2 year high.

Shares of Lennar Corp, the second-largest U.S. homebuilder in terms of revenue, shot up 3.4 percent to $40.33. The stock of top U.S. homebuilder D.R. Horton Inc climbed 3.2 percent to $23.37.

The S&P 500 is 0.2 percent from its record intraday high of 1,902.17 set on May 13 and above its record closing high of 1,897.45 the same day.

The CBOE Volatility index touched 11.46, its lowest level since March 2013, reflecting a lack of nervousness among investors. Known as Wall Street’s fear index, the VIX was down 4.2 percent at 11.53, which is extremely low by historical standards. The low level reflects investors’ lack of anxiety and “a certain amount of complacency,” said Donald Selkin, chief market strategist at National Securities in New York.

“The lower the VIX, the more overbought the market gets, leaving it vulnerable to some kind of setback,” Selkin said.

The Dow Jones industrial average rose 58.19 points or 0.35 percent, to 16,601.27. The S&P 500 gained 7.14 points or 0.38 percent, to 1,899.63. The Nasdaq Composite added 25.32 points or 0.61 percent, to 4,179.67.

Volume was light going into the Memorial Day holiday weekend, when the U.S. stock market will be closed on Monday. About 2.64 million shares have traded on all U.S. platforms so far today, according to BATS exchange data.

The stock of Hewlett-Packard Co gained 6.6 percent to $33.88. It was the S&P 500’s best performer a day after the personal computer maker said it may cut as many as 16,000 more jobs in a major ramp-up of CEO Meg Whitman’s years-long effort to turn the company around and relieve pressure on its profit margins.

Going against Friday’s modest upswing was Aeropostale . The stock tumbled 24.2 percent to $3.43 after the teen apparel retailer forecast a bigger-than-expected loss for the current quarter.

In contrast, PTC Therapeutics shares surged 50.9 percent to $23.12 after European regulators recommended a conditional marketing authorization for the biotech company’s drug for Duchenne muscular dystrophy.

An industry report showed fund investors worldwide pulled $7 billion out of stock funds in the week ended May 21 on weak U.S. economic data and disappointing corporate results. The outflows from stock funds, which include both mutual funds and exchange-traded funds, reversed the previous week’s inflows of $11 billion. Funds that specialize in U.S. stocks posted $10.9 billion in outflows, according to Bank of America Merrill Lynch Global Research report.

Reporting by Angela Moon; Editing by Jan Paschal

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