US stocks closed at multi-year highs on Thursday, with the S&P 500 ending at its highest level since before the collapse of Lehman Brothers as investors hailed a new European bond-buying program aimed at stemming the region's debt crisis. Sentiment was also boosted by stronger-than-expected data on the US services sector and labour market, which was especially notable ahead of Friday's non-farm August payrolls report.
The rally was broad, with more than three-fourths of stocks listed on both the New York Stock Exchange and Nasdaq ending higher. Materials, financials and industrials - groups tied to the pace of economic growth - led with gains of more than 2 percent, giving the Dow index its biggest daily gain in two months and helping the Nasdaq advance to its highest since 2000.
--- Nasdaq hits 12-year high, S&P at best level since May '08 "As clouds related to Europe start to drift off, there's no question that there's still juice left from here," said Richard Weiss, a Mountain View, California-based senior money manager at American Century Investments, which has about $120 billion in assets under management. "That equities are up double digits year-to-date doesn't deter us from remaining overweight on them for the foreseeable future."
Tech shares helped lift the Nasdaq in its best daily performance since July 27. SanDisk Corp climbed 8.4 percent to $44.01 and Micron Technology Inc added 7.8 percent to $6.68. The Dow was lifted by Walt Disney Co, which advanced 2.1 percent to an all-time closing high of $51.86.
US companies added staff in August at the fastest clip in five months, according to the better-than-expected ADP report, while a gauge of employment in the service sector also improved more than had been anticipated. New weekly claims for jobless benefits fell to the lowest level in a month.
"ADP doesn't correlate perfectly with payrolls, but people are feeling better about the jobs market these days," Young said. "There was confidence we would see jobs in the mid-100's even before this." The Dow Jones industrial average rose 244.52 points, or 1.87 percent, to 13,292.00. The Standard & Poor's 500 Index was up 28.68 points, or 2.04 percent, at 1,432.12- its highest level since May 2008, before the financial crisis began to gather steam. The Nasdaq Composite Index was up 65.12 points, or 2.12 percent, at 3,134.39.
Equities have rallied in recent months on growing expectations for ECB action. The S&P is up about 8 percent since the start of July. In company news, Supervalu Inc said it would close about five dozen stores as it works to turn around its grocery business, which lags Kroger Co and Wal-Mart Stores Inc. Supervalu shares rose 3.5 percent to $2.36.
Realty Income Corp plans to acquire American Realty Capital Trust Inc for about $1.93 billion as it looks to diversify its portfolio outside the retail industry. Shares of Realty Income slipped 0.6 percent to $42.21 and Capital Trust rose 2 percent to $12.20. Volume was stronger than in recent sessions, with about 6.98 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq. However, it remained below last year's daily average of 7.84 billion.
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