Today in business: 5 things you need to know

1. POSITIVE HOUSING AND EMPLOYMENT DATA LIFT MARKETS

Stocks surged early Thursday with the release of encouraging housing and unemployment figures, as online marketplace eBay posted better-than-expected quarterly revenue. EBay shares jumped by three percent, and the S&P 500 hit a five-year intraday high. The new economic data — builders broke ground on more homes than expected in December, and weekly applications for jobless benefits fell to a five-year low — suggested that the recovery is progressing slowly, but increasingly surely. "The economy is entering the year maybe not with a running start, but certainly a head start," says Jack Ablin, chief investment officer of BMO Private Bank in Chicago. "It helps build a nice story for 2013." [Bloomberg]

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2. EUROPE, FAA GROUND DREAMLINERS

European regulators on Thursday grounded all Boeing 787 Dreamliners, following the lead of the Federal Aviation Administration, which ordered all of the $207 million aircraft taken out of service on Wednesday until airlines could show their batteries were safe. The moves came after a series of mishaps involving Boeing's newest line of jumbo jets, the latest of which came early Wednesday when an All Nippon Airways pilot had to make an emergency landing after instruments warned of battery trouble and smoke. All Nippon Airways and Japan Airlines have temporarily pulled their Dreamliners out of service, too. Boeing said it was "working around the clock" to restore faith in the aircraft. [Los Angeles Times, Guardian]

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3. CITIGROUP TAKES A HIT

Citigroup reported rising profit in the last quarter of 2012, but still fell short of Wall Street's expectations, sending the massive bank's stock tumbling by 3.4 percent early Thursday. Citi posted $2.32 billion of charges for layoffs and lawsuits. The company was making its first official report under its new CEO, Michael Corbat. He took over when former boss Vikram Pandit was ousted in October, and said the company is still struggling through competitive and regulatory problems he inherited. "It will take some time to work through the challenges of the current environment," Corbat said. [Reuters]

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4. CHINA INVESTS HEAVILY IN EDUCATION

China is investing $250 billion a year to educate tens of thousands of young people migrating from farms to cities, in a bid to boost economic development by creating a bigger, better-educated middle class, reports The New York Times. The transformation the country is working toward would be similar to the expansion of the white-collar middle class in the U.S. made possible by the G.I. Bill, which helped educate millions of World War II veterans in the 1940s and '50s. In China, however, the effort could prove tricky. "It will move China forward in its economy, in scientific innovation and politically," said Wang Huiyao, the director general of the Center for China and Globalization in Beijing, "but the new rising middle class will also put a lot of pressure on the government to change." [New York Times]

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5. WOMEN SHINE IN HEDGE-FUND WORLD

Once high-flying hedge funds lagged behind the market as a whole in 2012, for the fourth year in a row. Not all fund managers were stuck in a slump, though. A new study released by consulting firm Rothstein Kass found that women who manage hedge funds outperformed men, earning an average return of 8.95 percent while the global hedge fund index only gained 2.69 percent. Meredith Jones, director at Rothstein Kass and the author of the report, said one reason was that women tend to be more risk-averse than men, which helps in a volatile market. "What women-run firms are able to do is capture the upside while really [limiting] the downside," Jones said. [Yahoo Finance]