NEW YORK — Stocks ended Wednesday on a positive note after a batch of economic reports offered hope that the U.S. economy is improving.
Incomes rose last month, and consumer spending climbed for a fifth month. That raised hopes that shoppers will hit the malls in droves the day after Thanksgiving, the start of the holiday shopping season.
At the same time, fewer people claimed unemployment benefits last week, a sign that the labor market is recovering.
“There are fundamental signs that the economy is turning a corner,” said John O’Don oghue, co-head of equities at Cowen & Co.
The Dow Jones industrial average surged 150.91, or 1.4 percent, to 11,187.28. The Standard & Poor’s 500 gained 17.62, or 1.5 percent, to 1,198.35. The Nasdaq composite rose 48.17, or 1.9 percent, to 2,543.12.
The upturn marked an abrupt reversal from Tuesday, when an exchange of artillery fire between North and South Korea led nervous investors to sell stocks and dash into gold, Treasurys and other assets often used as hiding spots. Investors also shrugged off a steep fall in new-home sales and manufacturing orders.
Tim Speiss, chairman of the wealth-advisory group at EisnerAmper, said investors were right to focus on the improved signs in employment and consumer spending, which are far more important to an economic resurgence than home sales or manufacturing orders.
“If we don’t have strong consumer spending in this economy, we’re in trouble,” said Speiss. “When there’s spending, manufacturing will increase to meet that demand.”
The government said first- time claims for unemployment benefits last week fell 34,000, to 407,000. That was much better than the 435,000 new claims economists had expected.
A separate report showed that Americans’ incomes rose 0.5 percent last month, slightly better than expected. Their spending rose 0.4 percent, up slightly from September.
Safety assets moved lower as investors became more willing to take on risk. Treasury prices edged lower, pushing their yields higher. The yield on the 10-year note rose Tuesday to 2.92 percent from 2.77 percent. Gold fell to $1,375 an ounce, down from $1,379.
Investors largely dismissed downbeat reports that showed declines in sales of manufactured goods and new- home sales.
Orders for durable goods fell 3.3 percent, while sales of single-family houses slid 8.1 percent, the fourth time the rate has dropped in the past six months.
