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The Globe and Mail

The close: S&P 500 hits fresh five-year high

The U.S. benchmark index rose to a fresh five-year high on Friday, after a smaller-than-expected trade deficit pointed to stronger economic activity in the fourth quarter and European leaders agreed to a seven-year budget.

The S&P 500 closed at 1517.93, up 8.54 points or 0.6 per cent. The blue-chip Dow Jones industrial average closed at 13,992.97, up 49.15 points or 0.4 per cent – after briefly rising above 14,000 earlier in the day. In Canada, the S&P/TSX composite index closed at 12,801.23, up 45.31 points or 0.4 per cent.

Trading volumes were relatively low because of the winter storm battering the U.S. northeast.

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The U.S. trade deficit fell to $38.5-billion (U.S.) in December, a much steeper drop than expected, which points to economic growth in the fourth quarter when revised figures are released. A preliminary reading showed a contraction of 0.1 per cent.

China's trade surplus in January was bigger than expected, with exports rising 25 per cent over last year.

In Europe, EU leaders agreed to a seven-year budget that entails the region's first-ever spending cuts.

Stocks reacted favourably: The U.K.'s FTSE 100 rose 0.6 per cent and Germany's DAX index rose 0.8 per cent.

Among U.S. stocks, LinkedIn Corp. surged 21.3 per cent, to a record high of $150.48, after reporting income (excluding some extraordinary items) of $40.2-million or 35 cents a share, topping expectations.

Boeing Co. fell 1.1 per cent after it warned two European airlines that deliveries of its 787 Dreamliner would be delayed as it works with regulators to determine a solution to onboard fires that have grounded its fleet of new airliners.

Among key commodities, crude oil fell to $95.72 a barrel, down 11 cents. Gold fell to $1,666.90 an ounce, down $4.40. Suncor Energy Inc. rose 0.2 per cent and Barrick Gold Corp. rose 0.5 per cent.

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