US stocks advance

Strong US consumer confidence helped stocks advance on Tuesday and the S&P 500 to pierce the key 1,370 point level, while oil prices suffered their biggest one-day drop in 2-1/2 months. Stocks on Wall Street continued with their upward trend as consumer confidence in the world's largest economy rose to a one-year high in February, according to a survey that took into account optimism about the labour market versus concerns over rising gasoline prices.
Consumer confidence is key to the US economy, as consumer spending makes up more than two-thirds of economic activity. ----- S&P 500 index hit a session high above 1,373 "This continues the trend we've seen over the past few months, where we're getting data that indicates things are getting better," said Mike Shea, managing partner and trader at Direct Access Partners in New York. The impact from the consumer confidence reading was, however, offset by data showing orders for US durable goods fell the most in three years in January. Another report indicated a decline in home prices in December.
"They are focusing on the positive and eliminating the negative reports, which I am very interested in because durable goods was tough - it was a big miss," said Ken Polcari, managing director of ICAP Equities in New York. "The fact is, those couple of reports that came out today are clearly conflicted, clearly mixed. So once again, we are kind of stuck in the middle." The S&P 500 index hit a session high above 1,373, keeping alive February's rally in stocks. The technology-laced Nasdaq index hit an intraday peak not seen since 2000 as shares of some chipmaking companies outperformed.
Some analysts cautioned that the run-up in equities has been on light volume and said any more gains could trigger selling. Daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.89 billion shares so far in February. The average in February 2011 was 7.81 billion.
Still, an S&P close above 1,370 could invite momentum buying as money managers chase performance. "From that standpoint, it would be good for us to close above 1,370," Shea said. "If we get any sort of uptick in volume, that will be very positive for the market. If volume stays at this level, it might be more likely that we pull back." The Dow Jones industrial average was up 16.12 points, or 0.12 percent, at 12,997.63. The Standard & Poor's 500 Index was up 1.99 points, or 0.15 percent, at 1,369.58. The Nasdaq Composite Index was up 11.93 points, or 0.40 percent, at 2,978.09.
Wall Street's strength was shadowed by a rebound in world stocks and European shares. Stocks opened the session flat after data showed orders for long-lasting goods had the biggest fall in three years and dented optimism about the pace of the domestic recovery. Daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.89 billion shares so far in February. The average in February 2011 was 7.81 billion.
Technology shares ranked among the best performers, with Micron Technology Inc up 6.8 percent at $9.14 after Intel Corp said it will sell its stake in two wafer factories to Micron and buy chips from the company. Intel advanced 1.3 percent to $27.23. The PHLX semiconductor index rose 1.9 percent.
Retailers got a lift from the earnings of Office Depot Inc, which surged 16.2 percent to $3.51, and AutoZone Inc, which rose 2.5 percent to $375.13. With earnings season drawing to a close, 472 of the S&P 500 components have reported results through Tuesday morning . About 63 percent beat analysts' expectations, below the average 70 percent beat rate in the last four quarters, but slightly above the average of 62 percent since 1994.