NEW YORK — A drop in unemployment claims and a rise in home sales pulled the stock market higher in light trading ahead of Thanksgiving.
Modest gains Wednesday took the Dow Jones industrial average and the Standard & Poor’s 500 index to 13- month highs.
The economic news, as well as a drop in the dollar, stoked investors’ appetite for higher-returning but riskier investments such as stocks. For months, investors have been weighing their desire for bigger returns with fears that the stock market will falter if the economy looks like it won’t maintain a recovery.
Investors drew confidence from a handful of promising economic reports. The government said new claims for unemployment insurance fell by 35,000 last week to 466,000. That’s the fewest since September 2008 and better than the 500,000 that economists had expected.
The drop in claims suggests the job market is healing, but concern remains that the improvement will be temporary. The jobless rate hit 10.2 percent in October, and many analysts believe it will keep rising before starting to improve next summer.
In other economic reports, new- home sales rose 6.2 percent to an annual rate of 430,000. That’s above what economists surveyed by Thomson Reuters had expected.
The government also said consumer spending rose a brisk 0.7 percent last month after falling in September. It was the best showing since August, when the government’s Cash for Clunkers programs enticed people to buy cars. The report was a welcome sign as the holiday shopping season goes into full swing.
The Dow Jones industrial average rose 30.69, 0.3 percent, to 10,464.40, its second gain in three days and its best finish since October 2008.
The broader Standard & Poor’s 500 index rose 4.98, 0.5 percent, to 1,110.63, and the Nasdaq composite index rose 6.87, 0.3 percent, to 2,176.05.
