March 28, 2013

S&P 500 moves above its record high, keeps going

Christina Rexrode / The Associated Press

NEW YORK — There goes another stock market record.

5.34 (0.34%)

The Standard & Poor's 500 crossed into record territory Thursday, beating the closing high it set in pre-financial crisis days. Three weeks earlier, the Dow Jones industrial average beat its own 2007 record.

The S&P 500, a barometer that investors use to gauge how the market is performing, edged above the Oct. 9, 2007, record close of 1,565 about an hour into trading. At 3:45 p.m., the index was holding on to the record at 1,568.19. That was up five points from the day before, a small increase but notable for the milestone it obliterated.

Investors will be waiting until the end of trading, at 4 p.m. EDT, to see if the index can hold on to the record.

Their reactions were more guarded than celebratory. Even as the S&P touched new milestones, investors noted that the U.S. economy's footing is still uncertain, and the European debt crisis still far from resolved. Some also are concerned that the gains are being artificially fueled by the Federal Reserve's easy money policy.

"Getting back to where we were is an important step," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. But, he cautioned in a note to investors: "Markets are volatile, and if you are a long-term investor you should expect declines."

For most of this year, the stock market has zoomed ahead. A mixed performance over the last two weeks, thanks to the bailout of cash-strapped Cyprus, has been more the exception than the rule. Thursday marks the end of first-quarter trading, as markets will be closed for the Good Friday holiday. The Dow is up 11 percent for the three-month period, the best performance in more than a year. Last year, it lost ground in two quarters and was up 4 percent and 8 percent in the other two.

On Thursday, though, news about the U.S. economy and the European debt crisis was far from decisive. For every sign that things were improving, another said it wasn't.

The government reported that the U.S. economy grew faster than first estimated in the fourth quarter. But the growth, an annual rate of 0.4 percent, was still anemic. The number of Americans seeking unemployment benefits jumped for the second straight week. On a longer time frame, though, jobless claims have been declining since November.

Investors are also uncertain of what to make of the continuing debt crisis in Europe. Portugal reported that its budget deficit widened. In Cyprus, banks reopened for the first time in nearly two weeks, after closing because the government was worried that depositors would make panicked withdrawals. The country reached a deal late Sunday for bailout loans from other European countries.

Like the Dow record three weeks ago, the S&P record reminded investors of a headier time. The last time the S&P closed above 1,565, in the fall of 2007, was back before the financial crisis imploded. October 2007 was pre-bailouts, pre-Great Recession, back when jobs were much easier to come by. Bear Stearns still existed. So did Lehman Brothers, Wachovia and Washington Mutual.

But by March 2009, long after the subprime mortgage market had been revealed as an unsustainable bubble and rumors were buzzing that the government might nationalize U.S. banks, the S&P had cratered from its lofty heights. It fell to its Great Recession low, 676.53, on March 9, 2009 — down 57 percent from its October 2007 pinnacle. Now, with Thursday's gains, it has more than doubled since reaching that bottom. Including dividends, it is up 152 percent.

With the quarter ending, investors noted the records it had brought for the Dow. The Dow climbed for the first 10 trading days of March, a record not matched in more than 16 years. Its record since then hasn't been as impressive. The index fell on five of the last nine trading days.

Like other major market indicators, the S&P darted between small gains and losses shortly after trading opened Thursday. By midday the indexes were all slightly higher. The Dow was up 30 points, or 0.2 percent, at 14,557. The Nasdaq composite rose a point, 0.03 percent, to 3,257.

Among stocks making big moves:

—Research In Motion, the maker of BlackBerry phones, rose after surprising analysts with a profitable quarter and better-than-expected sales of its new touch-screen BlackBerry 10s. The company hopes to take back some of the market share it has lost to Apple's iPhone and other competitors. The stock rose 36 cents, more than 2 percent, to $14.93.

—Repros Therapeutics, a drug developer, shot higher on news that its potential treatment for low testosterone moved closer to regulatory approval. The stock rose $6.27, or 69 percent, to $15.40.

—Signet Jewelers, which runs Kay and Jared stores, and Mosaic, the fertilizer maker, were both up after reporting higher quarterly profits and revenue. Signet rose more than 6 percent, $3.97, to $67.24. Mosaic was up nearly 2 percent, rising $1.03 to $59.71.

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