US stocks rise to record levels before crucial jobs data

U.S. stocks surged, sending the Dow Jones Industrial Average to a fresh record high, as Federal Reserve officials said economic weakness suggests continued stimulus and investors await data this week on jobs and growth.

The Standard & Poor’s 500 Index added 0.4% to 1,770.49 at 4 p.m. in New York, within two points of its all-time closing high. The Dow added 128.66 points, or 0.8%, to 15,746.88, surpassing its previous closing record of 15,680.35 on October 29. Nasdaq slid 0.2% to 3,931.95. About 6.1 billion shares changed hands on U.S. exchanges, 3% above the three-month average.

Investors follow closely economic data to asses the condition of the U.S. economy after the central bank last week said it needs to see more evidence of sustained improvement before slowing the pace of its $85 billion monthly bond purchases. St. Louis Fed President James Bullard defined as “certainly possible” that the Fed would reduce bond purchases after its next meeting ending December 18 if the labor market continues to show improvement and inflation ticks up.

William English, head of the Division of Monetary Affairs, backed Fed’s strategy of maintaining low interest rates while unemployment is above 6.5% and wrote that an even lower threshold may be helpful. Another paper by David Wilcox said the weakness of the U.S. economy calls for a “highly accommodative monetary policy.”

“Our initial assessment is that they considerably increase the probability that the FOMC will reduce its 6.5% unemployment threshold for the first hike in the federal funds rate,” Jan Hatzius, chief economist of Goldman Sachs Group Inc., wrote yesterday, referring to the studies.

In corporate view, Tesla soared 15% to $151.16 for its biggest slide since January 2012. The company said it delivered about 5,500 Model S vehicles in the third quarter while Brian Johnson, an auto analyst at Barclays Plc, had expected 5,820.

Ralph Lauren advanced 5.5% to $180.52. The company said it now expects full-year revenue to grow more than 5 percent, up from an earlier projection of an increase of at least 4%. Ralph Lauren raised its quarterly dividend to 45 cents a share from 40 cents.

Whole Foods reported its fiscal fourth-quarter earnings rose 7% to $121 million, or 32 cents a share. However, revenue totaled $2.98 billion, below the $3.04 billion forecast by analysts in a Thomson Reuters survey. Whole Foods shares tumbled almost 9% in after-hours trading.

Abercrombie & Fitch Co. sank 14%to $33.13 which was the biggest drop in the S&P 500 and its lowest level in almost a year. The retailer’s sales trailed analysts’ estimates as teens didnt spend as much as expected on clothing.