Friday, March 7, 2014
By Christina Rexrode / The Associated Press
(Continued from page 1)
Specialists Peter Kennedy, Bernard Wheeler and Philip Finale confer on the floor of the New York Stock Exchange on Wednesday. Global markets rose Thursday.
The Associated Press
Investors said Thursday that the S&P's crossing over 1,700 points might give consumers a psychological boost, but they were hardly crowing about a new era in stocks. Turns out it's quite common for indexes to hit records. Since 1950, the S&P has hit a high about 7 percent of the time, or an average of about every 15 days, Courtney said. The S&P's last record close was just eight trading days earlier, on July 22.
The S&P made the jump from 1,600 to 1,700 in less than three months. The index first traded above 1,600 on May 3. The first close above 1,500 was in March 2000.
The market's sharp advance Thursday was a stark contrast with the previous two days, when the S&P 500 moved less than a point each day. On Tuesday, investors didn't want to make big moves ahead of the Federal Reserve's policy announcement the next day. On Wednesday, the Fed didn't make much news after all. The central bank said, unsurprisingly, that the U.S. economy was recovering but still needed help. The Fed didn't give any indication of when it might cut back on its bond-buying program, which has been supporting financial markets and keeping borrowing costs ultra-low.
Among the good economic and corporate news that cheered investors Thursday:
• China's purchasing managers' index – a gauge of business sentiment – rose to 50.3 in July from 50.1 in June. Analysts had expected a modest decline below 50.
• The Labor Department said that the number of Americans applying for unemployment benefits fell 19,000 to 326,000. That was the fewest since January 2008, one month after the Great Recession started in December 2007.
• The Institute for Supply Management, a trade group of purchasing managers, said its index of manufacturing jumped to 55.4 in July, up from 50.9 in June and well above an expected reading of 51.8. A number above 50 indicates growth.
• Auto companies reported strong sales gains for July. Ford, Chrysler and Nissan each reported U.S. sales growth of 11 percent compared with the same month a year ago.
An index of transportation stocks also rose sharply. Many investors see that sector as a leading indicator for the economy because freight and shipping companies tend to get busier as the economy improves.
The Dow Jones Transportation average jumped 208.26 points, or 3.2 percent, to 6,670.06, led by a surge in Con-way, a Michigan-based freight company that reported earnings Thursday that were far higher than investors expected. Con-way rose $4.34, or 10.5 percent, to $45.79.
The price of crude oil rose $2.86, or 2.7 percent, to $107.89 a barrel. Gold slipped $1.80 to $1,311.20 an ounce. The dollar rose against the euro and the Japanese yen.
The yield on the 10-year Treasury note rose sharply, to 2.72 percent from 2.58 percent late Wednesday. That means investors were selling U.S. government debt securities, possibly over fears that rates will go higher as the economy strengthens and they'll lose more money. When yields rise, the value of bonds falls.
Among stocks making big moves:
• Sprouts Farmers Markets more than doubled on the company's first day of trading, jumping $22.11 to $40.11 – another sign that investors are becoming more comfortable taking on risk.
• Yelp soared $9.70, or 23.2 percent, to $51.50. The consumer review website continued to lose money in its latest quarter, but it sold more ads and drew more visitors.
• Exxon Mobil fell $1.02, or 1.1 percent, to $92.73, after reporting lower earnings as oil and gas production slipped. Profit margins on refining oil also fell.