NEW YORK — A rally in financial stocks Thursday helped the market extend its grind higher to a third day.
The Standard & Poor’s 500 index cleared an important hurdle watched by traders when it closed just above its January peak to set a 17- month high. That could bring some hesitant buyers into the market.
Financial shares rose after Citigroup chief executive Vikram Pandit said the bank was on a path toward “sustained profitability” as it sells off risky assets. The bank has been the hardest hit by the financial crisis, so the upbeat assessment helped boost expectations about the economy. The stock rose 5.6 percent.
Financials’ climb helped offset concern about a spike in inflation in China. The country said its inflation rate rose to 2.7 percent in February, from 1.5 percent in January.
A steep rise in prices could force China to raise interest rates. That, in turn, could slow one of the world’s fastest-growing economies and put a damper on a global recovery.
Jim Dunigan, managing executive of investments at PNC Wealth Management, said he expects that China will be able to contain prices for now.
“We’ll see hints of inflation here and there, but I don’t think we’ll see that problem for a while,” he said.
In the U.S., the Labor Department said workers filing for jobless benefits for the first time fell by 6,000 to 462,000 last week. Economists were predicting a slightly bigger drop, according to Thomson Reuters.
The report showed some easing in the labor market, but it didn’t point to the increase in hiring that investors want to see. Stocks have traded in a narrow range since the Labor Department said last Friday that employers cut fewer jobs in February than analysts expected.
The Dow Jones industrial average rose 44.51, or 0.4 percent, to 10,611.84. It is down 1.1 percent from its recent high Jan. 19. The S&P 500 advanced 4.63, or 0.4 percent, to 1,150.24, above its Jan. 19 close of 1,150.23. The index stands at its highest level since Oct. 1, 2008.
The Nasdaq composite rose 9.51, or 0.4 percent, to 2,368.46, for its sixth straight advance.
Bonds were little changed.
“The concept of an economic recovery is garnering a little more credibility,” said David Joy, chief market strategist at RiverSource Investments. “We’ve arrived at a place where stocks are fairly valued.”
