U.S. stocks rose, sending the Standard & Poor’s 500 Index to a two-year high, after higher- than-estimated growth in payrolls and service industries bolstered optimism in the economy. American Express Co. and Walt Disney Co. climbed at least 2.5 percent to lead the Dow Jones Industrial Average to its highest close since August 2008. J. Crew Group Inc. climbed 2.3 percent as three people with knowledge of the matter said Sears Holdings Corp. and Urban Outfitters Inc. are weighing rival bids for the retailer. Mosaic Co. rallied 2.8 percent after the fertilizer company’s earnings topped estimates.
The S&P 500 rose 0.5 percent to 1,276.55 as of 4 p.m. in New York, its highest level since Sept. 2, 2008. The Dow increased 32.29 points, or 0.3 percent, to 11,723.57. The Dollar Index, a gauge of the currency versus six major peers, rallied 1 percent for its biggest advance since Dec. 15.
“There was a pretty positive response to the economic news this morning and the market’s carrying that through,” said Bruce McCain, who oversees $25 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “By and large, most of the economic reports do seem to be picking up and suggest we seem to have good momentum going into this quarter and the year.”
The S&P 500 erased a 0.4 percent drop in the first half hour of trading after a report showed service industries grew at the fastest pace in almost five years. ADP Employer Services said before exchanges opened that companies added 297,000 jobs last month, almost triple the median economist estimate.
Jobs Report
The ADP data came two days before a Labor Department report that’s forecast to show the U.S. added 150,000 jobs in December and the unemployment rate slipped to 9.7 percent from 9.8 percent, according to the median estimate of economists in a Bloomberg survey. U.S. equity index futures trimmed losses in pre-market trading after the data.
The Institute for Supply Management’s non-manufacturing index rose to 57.1 last month, the highest level since 2006, according to a report today. The index covers about 90 percent of the U.S. economy. The median estimate in a Bloomberg survey of economists called was 55.7.
“Futures were ugly and now we’re coming back off that; ADP helped, ISM helped too,” said Jason Brady, a managing director at Thornburg Investment Management in Santa Fe, New Mexico, which oversees about $74 billion in assets. The dollar is rallying because “one, it’s better economic news. Two, it’s a little more yield support. Treasuries go higher in yield, and the dollar is a slightly more attractive place to be. Three, we got more noise from Europe.”
Dollar Rises
The U.S. currency rose against the euro amid concern the European debt crisis will worsen. The Swiss National Bank excluded securities issued by Allied Irish Banks Plc, Anglo Irish Bank Corp. and Bank of Ireland Plc from the list of assets it accepts as collateral for its repurchase operations, according to its website.
To contact the reporters on this story: Inyoung Hwang in New York
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