Will Stock Market Bulls Carry Five Year Highs to New Heights?

 Major U.S. stock indexes and ETFs closed at five year highs on Thursday in response to good economic reports and potential settlement in the debt ceiling debate

spy, dia, qqq, iwm, earningsiscal cliff, etf, etfsDecember housing starts came in at 951,000, far exceeding expectations and last month’s reading, and weekly jobless claims logged 335,000, beating expectations and the previous reading.  On the downside, the Philadelphia Fed manufacturing report for January took an unexpected plunge into negative territory at -5.8.

For the day, major index ETFs posted solid gains.  The Dow Jones Industrial Average (NYSEARCA:DIA) jumped 0.63%, the S&P 500 (NYSEARCA:SPY) added 0.56%,  the Nasdaq 100 (NYSEARCA:QQQ) climbed 0.45% and the Russell 2000 (NYSEARCA:IWM) jumped 0.91%.

The most significant part of today’s gain was the advance of the S&P 500 (NYSEARCA:SPY) above recent resistance levels at 1475.

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In Washington, murmurs of a temporary increase in the U.S. debt ceiling also added to the positive atmosphere for stocks and ETFs.

Bank of America headlined earnings and was down 4.24% as investors didn’t like what they heard and Intel gained in the regular session but was smacked hard in the after hours session with a drop of 5.3% after releasing its earnings.

Citigroup (NYSE:C) was also punished for missing expectations and took a decline of 2.9%.

In Europe, Germany said it wants its gold back from the Federal Reserve and Europe also reported positive retail sales results.

The week wraps up tomorrow with earnings from General Electric (NYSE:GE) and Morgan Stanley along with the University of Michigan consumer sentiment report.

Bottom line: Major resistance in the S&P 500 and its ETF, (NYSEARCA:SPY) was broken today in a positive session, however, a late session sell off muted overall results for the day.  Should this new level prove sustainable over the next few days, higher prices could be expected ahead.

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John Nyaradi is the author of The ETF Investing Premium Newsletter.