Updated March 26 at 6:25pm

S&P 500 index climbs to 4-month high while commodities rally


NEW YORK - Stocks jumped, sending the Standard & Poor’s 500 Index above its highest close in four months, as Cisco Systems Inc.’s sales topped estimates, U.S. building permits surged and speculation grew that Spain will get a bailout. Commodities rallied, while the Dollar Index retreated.

The S&P 500 rose 0.6 percent to 1,413.24 at 12:43 p.m. in New York, above its highest close since April 3. Wheat jumped 2 percent and oil topped $95 a barrel for the first time in three months to lead the S&P GSCI Index of commodities to the highest level since May. The Dollar Index, a gauge of the currency against six major peers, slid 0.3 percent. Spain’s bonds climbed and the IBEX-35 stock index surged 4.1 percent on bets a bailout will pave the way for policy makers to buy its debt.

Cisco surged 8 percent to lead technology companies to the biggest gain among 10 groups in the S&P 500. Building permits, a proxy for future construction, rose to an 812,000 pace last month, the most since August 2008, the Commerce Department said. Federal Reserve Bank of Dallas President Richard Fisher repeated his view yesterday that the economy probably won’t lapse into a recession in 2013 and that new stimulus won’t spur growth.

“The fact permitting is improving in the housing market suggests the future is going to be there,” Jason Benowitz, who helps oversee $5 billion at Roosevelt Investment Group Inc. in New York as a portfolio manager, said in a phone interview. “That of course is positive for the market. On the other hand, you have to counterweight the less-likely chance of further monetary easing. Overall, I think it’s mixed to slightly positive.”

Losses erased

Stocks fell earlier after China reported foreign direct investment fell for the eighth time in nine months, while a person familiar with the matter said Spain is about to get an emergency disbursement from a 100 billion-euro ($123 billion) bailout package.

The S&P 500 is up 12 percent this year and approaching the four-year high of 1,419.04 reached on April 2. An S&P gauge of 11 homebuilders has rallied 56 percent in 2012 on optimism the industry is rebounding. While building permits increased, housing starts fell. Another report showed initial jobless claims rose by 2,000 to 366,000 last week.

Cisco surged after job cuts kept costs in check and price reductions attracted customers. Sears Holdings Corp. climbed 5.5 percent as its loss narrowed. Facebook Inc. dropped 5.7 percent as 271.1 million of its shares were allowed to trade following the end of its post-IPO lockup. Wal-Mart Stores Inc. fell 3.2 percent after posting second-quarter sales that trailed analysts’ estimates.

Fisher’s stance

The S&P 500 index had hovered around 1,400 for the previous seven trading sessions as investors awaited the Fed’s summit in Jackson Hole, Wyoming, at the end of the month. Intraday price movements in the index averaged 0.6 percent, the smallest fluctuations over a comparable period since January 2011, according to data compiled by Bloomberg. Daily swings in the Dow averaged 0.7 percent from Aug. 6 through yesterday, the narrowest since March, the data show.

The Dallas Fed chief Fisher in 2011 dissented twice against moves to push down long-term rates and to keep the benchmark U.S. interest rate near zero until at least mid-2013. He voted five times in 2008 in favor of tighter policy. This year he isn’t a voting member of the Federal Open Market Committee, which is scheduled to meet Sept. 12-13.

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