Stocks Rise; S&P 500 Moves Past 1,500
Thursday, May 3rd 2007, 11:14 am
News On 6
NEW YORK (AP) _ Wall Street rose modestly Thursday amid a burst of enthusiasm about the economy that lifted the Standard & Poor's 500 index past 1,500 for the first time since September 2000.
The S&P 500, the index most closely watched by market professionals, rose as high as 1,502.92 just over a week after the Dow Jones industrial average passed 13,000 for the first time. The S&P is now within striking distance of its closing high of 1,527.46, set March 24, 2000, just as the dot-com bubble began to burst and Wall Street began a three-year-long decline.
Stocks have soared in recent weeks as first-quarter earnings beat reduced expectations, and upbeat economic news added to the gains. On Thursday, the good news was about inflation: The Labor Department said wages, as measured by unit labor costs, rose at a tepid 0.6 percent rate in the first quarter. The news fed Wall Street's hopes for an interest rate cut later this year.
Perhaps giving the S&P its final push, the Institute for Supply Management said its index of non-manufacturing business rose to 56.0 in April from 52.4.
The modest moves in stocks Thursday come a day after Wall Street pushed higher and sent the Dow above 13,200 for the first time.
``People are watching the momentum moving the market higher and in some cases they're participating, maybe grudgingly, but they're missing out otherwise,'' said Bill Schultz, chief investment officer, at McQueen, Ball & Associates. ``There are a lot of people that are looking for a dip to buy and we haven't seen it. At some point you have to say, 'The dip isn't coming but I want to participate.'''
In late morning trading, the Dow Jones rose 23.24, or 0.18 percent, to 13,235.12. The blue chip index has hit 17 record closes since the start of the year and 39 since the beginning of October, its latest coming Wednesday.
The S&P 500 index rose 5.75, or 0.38 percent, to 1,501.67, hovering around 1,500 with the normal ebb and flow of trading.
The Nasdaq composite index rose 9.44, or 0.37 percent, to 2,265.28.
The S&P's achievement marked another milestone in Wall Street's recovery from a prolonged slump at the start of the decade. The slide began with the end of the dot-com boom, then accelerated as the economy fell into recession and after the Sept. 11, 2001, terror attacks. Corporate scandals including the collapse of Enron Corp. and Worldcom took a further toll on the market.
The S&P 500 fell to a low of 776.76 on Oct. 9, 2002, before starting its recovery. But while it and the Dow have made the long trip back, the Nasdaq, despite its own signs of vigor, is not expected to reach its closing high of 5,048.62, set March 24, 2000, anytime soon. The tech-dominated index was arguably overinflated by the rush to join the Internet boom.
Thursday's advance came as investors grew optimistic about inflation. Although Wall Street has surged higher over the past month, concerns about inflation, including that of wages, still dog the market as investors try o determine whether an inflation-wary Federal Reserve will become comfortable enough later in the year to lower short-term interest rates. The Fed has left rates unchanged at recent meetings, in part because of concerns about inflation.
Other economic data helped shape investor sentiment Thursday. The government also reported that the number of Americans seeking unemployment benefits fell by 21,000 last week to 305,000, the lowest level since mid-January. The decline was broader than expected and was the third straight decrease in weekly claims.
The economic figures come a day ahead of other Labor Department reports on nonfarm payrolls and unemployment.
In addition to economic data, the parade of earnings reports continued Thursday with General Motors Corp. turning in lower first-quarter earnings. GM's profit fell 90 percent from a year earlier, which benefited from a gain. The company also suffered losses in the residential mortgage business of GMAC Financial Services. GM, one of the 30 stocks that makes up the Dow industrials, fell $1.37, or 4.2 percent, to $31.07.
Bonds fell Thursday following the economic data; the yield on the benchmark 10-year Treasury note rose to 4.68 percent from 4.65 percent late Thursday.
Light, sweet crude fell 85 cents to $62.83 per barrel on the New York Mercantile Exchange.
The dollar was mixed against other major currencies, while gold prices fell.
OfficeMax Inc. fell $6.72, or 13.6 percent, to $42.74 after the office supplies retailer reported it swung to a profit from a loss though results fell short of what Wall Street had been expecting.
Talbots Inc. fell 90 cents, or 3.9 percent, to $22.36 after the apparel retailer lowered its first-quarter profit forecast amid weaker-than-expected sales of its namesake brand clothing in April.
IAC/InterActiveCorp., parent of Citysearch and Ticketmaster, fell $2.70, or 7 percent, to $35.89 after its first-quarter profit rose 32 percent.
Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange, where volume came to 597 million shares.
The Russell 2000 index of smaller companies rose 1.49, or 0.18 percent, to 829.95.
Overseas, markets in Japan were closed for a holiday. Britain's FTSE 100 rose 0.74 percent, Germany's DAX index gained 0.23 percent, and France's CAC-40 rose 0.22 percent.