A new 52-week low for the Dollar Index and a generally pleasing batch of economic data helped stocks make their way higher. However, buyers lacked the potency to push through resistance near 2009 highs as participation lacked ahead of the Thanksgiving holiday. Renewed pressure against the U.S. dollar sent the Dollar Index to a 1.1% loss, its worst single-session percentage drop in nearly four months. The drop also put the Dollar Index at a fresh 12-month low, but gave a broad lift to the equity market.
Participants were also generally pleased by the latest dose of data, which showed that personal income for October increased 0.2% and personal spending for October increased 0.7%. Respective increases of 0.1% and 0.7% had been widely expected. Core personal consumption expenditures (PCE) for October made a month-over-month increase of 0.2%, which exceeded the 0.1% increase that had been forecast.
Initial jobless claims for the week ending November 21 fell more than expected to 466,000, which marks the first time in one year that initial claims fell below 500,000. Meanwhile, continuing claims fell more than expected to 5.42 million, which marks a multimonth low. However, the decline in continuing claims still stems mostly from the expiration of unemployment benefits.
New home sales spiked a surprisingly strong 6.2% in October to an annualized rate of 430,000. The consensus had called for a mere 0.4% increase.
The only disappointing piece of data came from the latest durable goods orders report, which showed that orders fell 0.6% in October. The consensus had called for a 0.5% increase. Orders less transportation fell 1.3%, but had been expected to increase 0.7%. The considerable misses were countered by news that orders and orders less transportation for the previous month were revised higher to reflect an increase of 2.0% and 1.8%, respectively. That's double what had initially been reported.
Amid the largely positive dose of data and the dollar's dramatic drop, materials stocks made the strongest gains. The sector settled 1.5% higher.
Gold was a primary source of support for the materials sector. The yellow metal finished 1.7% higher at $1185.50 per ounce after setting a new record high near $1190 per ounce.
Oil prices also benefited from dollar weakness. Crude prices had started the session in negative territory, but rebounded to finish with a 2.6% gain at $77.96 per barrel. A slightly smaller-than-expected inventory build of 1.02 million barrels helped the move, but enthusiasm for that figure was initially mitigated by a larger-than-expected build of 1.0 million barrels of gasoline.
Financials made up the only sector in the S&P 500 that failed to make a gain. The sector lost 0.2% as participants continued to push against shares of diversified financial services players, which lost 0.9% as a group.
Despite broad-based gains, the S&P 500 was unable to push through resistance near 1113, which marks its 2009 high. Stocks were still able to close near session highs, though their gains were modest.
There wasn't much behind this session's move, however. Trading volume didn't even break 800 million shares on the NYSE. That's the lowest level in three months, but it shouldn't come as much of a surprise since U.S. markets are closed tomorrow in observance of Thanksgiving.
Treasuries had a solid session as the benchmark 10-year Note turned a loss of nearly 10 ticks into a gain of roughly 10 ticks. That put the yield on the Note down to 3.26%, which is its lowest level in one month. The rebound was helped by strong results from an auction of 7-year Treasuries. The auction produced a yield of 2.84% and attracted a bid-to-cover ratio of 2.76. That is above the previous auction's bid-to-cover ratio and that of recent averages.
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