NEW YORK - A drop in unemployment claims and a rise in home sales pulled the stock market higher in light trading ahead of Thanksgiving.
Modest gains Wednesday left the Dow Jones industrial average and the Standard & Poor's 500 index at 13-month highs.
The economic news, as well as a drop in the dollar, stoked investors' appetite for higher-returning but riskier investments like stocks. For months, investors have been weighing their desire for bigger returns with fears that the stock market will falter if the economy looks like it won't maintain a recovery.
Investors drew confidence from a handful of promising economic reports. The government said new claims for unemployment insurance fell by 35,000 last week to 466,000. That's the fewest since September last year and better than the 500,000 that economists had expected.
In other economic reports, new home sales rose 6.2 percent to an annual rate of 430,000 -- above what economists surveyed by Thomson Reuters had expected.
The government also said consumer spending rose a brisk 0.7 percent last month, after falling in September.
Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, N.J., said, "People may not believe in this market, but they're reluctantly being pulled into it with each of these reports."
The Dow Jones industrial average rose 30.69, or 0.3 percent, to 10,464.40, its second gain in three days and its best finish since October 2008. The broader Standard & Poor's 500 index rose 4.98, or 0.5 percent, to 1,110.63, and the Nasdaq composite index rose 6.87, or 0.3 percent, to 2,176.05.
U.S. markets are closed for Thanksgiving and will finish early on Friday.
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