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Stocks Rise, S&P Hits New High on Positive Economic Reports

Stocks finished higher, with the S&P 500 setting a new record, as investors cheered better-than-expected home price and manufactured goods reports.
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Stocks finished broadly higher on Tuesday, with the S&P 500 setting a new record, as investors cheered better-than-expected home price and manufactured goods reports.

The Dow Jones Industrial Average closed unofficially 69 points higher, the Nasdaq rose 51 points, or 1.2 percent, and the S&P 500 added 11 points to 1911.91 -- above its record closing of 1900.53 on Friday.

U.S. equity markets were closed Monday for the Memorial Day holiday.

"The big surprise so far is that you didn't have more activity – there have been a lot of people that were short this market and for the S&P to make a record closing high, you'd have thought they'd break out a bit further," said Art Cashin, director of floor operations at UBS Financial Services.

"[The bulls] have the momentum back—they have a minor obstacle in the S&P in the area between 1,910 and 1,913 but if we push through that, then things should be alright."

On the economic front, orders for long-lasting manufactured goods, from toasters to aircraft, unexpectedly rose 0.8 percent in April, according to the Commerce Department, exceeding expectation for a loss of 0.7 percent.

Adding to positive news, S&P/Case-Shiller's composite index of home prices in 20 metropolitan areas rose 0.9 percent in March, edging past expectations for a gain of 0.7 percent. Meanwhile, consumer confidence hit 83 in May, in line with expectations.

Gold prices slipped 2 percent to a 3-1/2 month low, extending losses after strong data lifted optimism about the economy. Gold miners including Barrick Gold, Newmont and Goldcorp were trading lower.

Adding to gains, European Central Bank chief Mario Draghi said the bank must be "particularly watchful" for any negative price spiral in the euro zone. That added to suggestions from other ECB policymakers that the bank was ready to cut rates next week to counter low inflation and weak lending in the euro zone, keeping asset purchases as an option. European shares rallied.

Pfizer stock edged up a day after the drugmaker walked away from its $116 billion bid to acquire Britain's AstraZeneca.

Hillshire Brands spiked more than 22 percent after the packaged food company was offered to be bought by poultry producer Pilgrim's Pride in a deal valued at $6.4 billion.

Aeropostale surged nearly 15 percent after the apparel retailer said it secured a $150 million credit facility from private equity firm Sycamore Partners, in what could be a lifeline for the struggling chain. Aeropostale reported its sixth straight quarterly loss last week.