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S&P 500 once again nears four-year high

NEW YORK -- Encouraging earnings from Cisco and hopeful signs in a housing report lifted the stock market Thursday. The gains nudged the Standard & Poor's 500 index near the four-year high it hit earlier this year.

Cisco Systems led the 30 stocks in the Dow Jones industrial average, surging 10 percent. The world's largest maker of computer networking equipment reported earnings late Wednesday that beat expectations, and it raised its quarterly dividend to 14 cents per share from 8 cents. Cisco gained $1.73 to $19.08.

Before the market opened Thursday, the Commerce Department reported that construction of single-family homes and apartments dipped 1.1 percent in July compared with June. But market analysts seized on another number: Building permits jumped to 812,000, the most since August 2008 and a hint of stronger construction in coming months.

"The housing numbers really got investors' attention," said Tim Speiss, chairman of the personal wealth advisers practice at EisnerAmper. "Houses are going to get built. It feeds other parts of the economy. A house isn't just sticks and bricks. It's everything else that goes into building a house."

The Dow added 103 points to 13268 shortly after 2:30 p.m. EDT, an increase of 0.8 percent. The broader Standard & Poor's 500 index rose 11 points to 1417.

It was enough to push the Dow and S&P 500 near their highest closing levels since 2007. The Dow closed at 13279 on May 1, and the S&P 500 at 1419 on April 2.

The S&P 500 has rallied more than 5 percent in the last three weeks. The first jolt was a pledge to protect the euro currency by the head of the European Central Bank, the second a report that showed strong U.S. hiring last month.

Steve Wood, chief market strategist for Russell Investments, said the stock market may simply tread water until the end of the month, when Federal Reserve Chairman Ben Bernanke gives a speech at Jackson Hole, Wyo. Investors expect Bernanke's speech will clarify whether the Fed plans to take additional steps to help the economy.

Markets often languish in August. Fewer shares are traded in late summer, as trading desks remain short-staffed until people return from vacation after the Labor Day holiday. Without any major economic news, trading volume usually dries up and stock indexes appear sluggish, as if stuck in their beach chairs.

On Wednesday, just 2.6 billion shares were traded on the New York Stock Exchange. Three months ago, daily trading volume on the NYSE averaged 3.8 billion.

Among other stocks making big moves Thursday:

  • Agilent Technologies slid 8 percent, the worst drop in the S&P 500. Agilent said a slump in global demand for its high-tech measuring products helped tug net income down 26 percent. Its stock lost $3.18 to $37.29.
  • PetSmart Inc. climbed 4 percent after the pet products store posted better earnings than analysts' forecasts. PetSmart's quarterly net income rose 28 percent, and it raised its annual profit forecast for the second time this year. The company's stock added $3 to $70.52.


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