S&P 500 Climbs as Consumers Get Ready for Lots of Holiday Shopping

NEW YORK (TheStreet) -- The S&P 500 effortlessly bagged a record close on Wednesday with trading volumes near 12-month lows as investors clocked out early for the Thanksgiving break amid improving sentiment about the U.S. economic recovery. Volume was more than 50% lower than Tuesday's session with about 360 million shares traded on the New York Stock Exchange, according to Bloomberg data.

The Dow Jones Industrial Average added 0.07%, also at a record close, while the S&P 500 climbed 0.28%, a new all-time high at 2,072.77. The Nasdaq spiked to a 14-year high, up 0.61%. 

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Markets largely discounted a Labor Department report that weekly jobless claims rose above 300,000 for the first time since September. The increase in jobless claims, higher than economists' estimates, was offset by signs of indications that consumers are poised for a breakout season of holiday shopping.

"That was a little surprising, but the four-week average is still below [300,000]," said Tom Sudyka, portfolio manager of LK Balanced Fund, in an investor conference call. "Week-to-week it's kind of hard to track on that but as long as the average stays below that, I think we're probably OK. It's so volatile and gets revised a lot."

Consumer sentiment fell slightly from preliminary readings but more importantly, remained at a seven-year high. Personal income in October gained 0.2%, while consumer spending climbed 0.2%. Economists surveyed by Bloomberg expected consumer spending to have increased 0.3% with personal income up 0.4%.

West Texas Intermediate crude prices continued to fall, doubling down on a 2.5% drop on Tuesday and falling to $73.79 a barrel. Anxiety over oil prices were high as the Organization of Petroleum Exporting Countries arrived for a meeting in Vienna to determine whether to restrain production for the first time since December 2008. Since midyear, crude prices have fallen more than 30% from a high of $107 a barrel.

"Our outlook for crude oil remains constructive, but OPEC may be disinclined to deeply and immediately slash its production," said Paul Christopher, chief international strategist at Wells Fargo, in a report. "We think Riyadh worries that civil wars in Libya and across the Syria-Iraq border could abruptly curtail oil production by up to four million barrels per day, an amount exceeding this year's extra global production."

Wells Fargo reduced its year-end 2015 projections for West Texas Intermediate crude to between $88 and $92 a barrel, from a previous forecast of $97 to $102 a barrel.

Chip stocks rallied alongside Analog Devices (ADI) after the company provided first-quarter earnings guidance above forecasts. Texas Instruments (TXN) , Skyworks Solutions (SWKS) , Avago Technologies, Broadcom (BRCM) , and Qualcomm (QCOM) all climbed. The Direxion Daily Semiconductor ETF (SOXL) spiked 6.5%.

Internet names rallied in light volume such as Facebook (FB) , which climbed 2.7%, cents below its record high. Twitter (TWTR) added 3.5%.

Verizon (VZ) and AT&T (T) were among the best performers on the Dow, recovering from losses suffered earlier in the week. Verizon spiked 1.4% while AT&T climbed 0.89%.

GoPro (GPRO) shares were surging nearly 6% on a Wall Street Journal report the company will launch a consumer drone line late next year.

Deere (DE) shares were down nearly 1% after quarterly revenue fell 5% to $8.97 billion. Hewlett-Packard (HPQ) climbed 4% even as fourth-quarter sales marked their 12th decline in the last 13 quarters.

Cubic Corporation (CUB) surged 8.2% after beating estimates in its fourth quarter and reporting a double-digit gain in sales.

Seadrill (SDRL) plummeted 22.8% following a suspension of its dividend payments and after third-quarter profits came in nearly half their levels a year earlier. Peer offshore drillers such as Transocean (RIG) and Diamond Offshore (DO) tumbled in sympathy.

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-- Written by Keris Alison Lahiff in New York.

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