S&P 500 has its third closing high
NEW YORK — The S&P 500 index climbed to its third record-closing high in four sessions on Thursday as traders shrugged off data that showed the economy shrank in the first quarter and bet on improvement in the second quarter.
New claims for unemployment benefits fell more than expected last week, pointing to a strengthening labor market and giving investors a reason to buy U.S. stocks. Data from the Commerce Department showed that the gross domestic product contracted for the first time in three years in the first quarter, although signs indicated it has rebounded.
“The headline figure was weaker than expected, but it was mainly due to slower inventory growth, which bodes well for future growth, future orders, new orders,” said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida.The S&P 500 gained 10.25 points or 0.54 percent, to 1,920.03 — a record close and a lifetime intraday high.Saut said that unless a decline materialized this week, the S&P 500 is “probably not going to come back below (the) 1,890 — 1,900 (level), which is where the near-term support is.”Citi analysts said the U.S. economy could grow nearly 4 percent in the second quarter, while Goldman Sachs raised its estimate to 3.9 percent.The Dow Jones industrial average rose 65.56 points or 0.39 percent, to 16,698.74. The Nasdaq Composite added 22.87 points or 0.54 percent, to 4,247.95.The U.S. 10-year Treasury note yield touched 2.40 percent, its lowest level since last June, on expectations of further policy easing by the European Central Bank next week. Low yields could keep pulling investors into dividend-paying stocks, with high-yielding utilities widely outperforming the S&P 500 so far this year.“If we continue to stay weak for whatever reason, then these bond proxies are going to keep doing great, the bond market will continue to defy skeptics, yields will continue to stay low, and the indexes will stay at their highs - or close,” said Doug Foreman, chief investment officer of Kayne Anderson Rudnick Investment Management in Los Angeles, California.Hillshire Brands surged 17.7 percent to $52.76 after Tyson Foods offered to top a bid from Pilgrim’s Pride. Tyson shares rose 6.1 percent to $43.25. Pilgrim’s Pride fell 1.1 percent to $25.09.The Dow Jones Transportation Average scored another record closing high, rising 0.4 percent to 8,110.35.Apple shares gained 1.8 percent to $635.38 after hitting $636.87, its highest level in a year and a half, a day after the iPhone maker announced it will buy music streaming and audio equipment company Beats for about $3 billion.Volume was light, with about 4.88 billion shares traded on U.S. exchanges, well below the 5.78 billion average so far this month, according to data from BATS Global Markets.Advancing stocks outnumbered declining ones on the New York Stock Exchange by a ratio of 2 to 1, while on the Nasdaq, three stocks rose for every two that fell.