The stock market surged on Wednesday, pushing the Standard Poor’s 500-stock index to a new nominal record high. The Dow Jones industrial average also set another record.
“The path of least resistance for the market remains higher, and despite some mixed economic data, investors are concluding that stocks remain a better place to be than risk-free assets,” said Jim McDonald, chief investment strategist at Northern Trust Global Investments.
The market’s gains were broad, with all but two of the S. P. 500’s 10 primary sectors up more than 1 percent.
The Dow industrials jumped 128.78 points, or 0.88 percent, to close at 14,802.24. The S. P. 500 climbed 19.12 points, or 1.22 percent, to 1,587.73. The Nasdaq composite index shot up 59.40 points, or 1.83 percent, to close at 3,297.25.
The day was the best session for both the Dow and the S. P. 500 since Feb. 27, and the best for the Nasdaq since Jan. 2. The Nasdaq traded at its highest point since November 2000.
“After we broke above the high, we saw momentum accelerate as investors saw it as a release of resistance,” said Katie Stockton, chief market technician at MKM Partners. “By definition, there is no more resistance for the S. P. now that we’re at new highs.”
With Wednesday’s gains, the Dow is up about 13 percent so far this year, the S. P. 500 is up 11.3 percent and the Nasdaq is up 9.2 percent.
Many investors viewed the strength in cyclical stocks — those closely tied to the pace of economic growth — as a sign that the rally still has staying power. The Dow Jones transportation average, viewed as a leading indicator for the broader market, rose 1.8 percent.
Technology was the day’s strongest group, with the S. P. technology sector index up 1.8 percent. The group was lifted by strong results at Adtran which jumped 14 percent to $22.46 and pulled up the shares of its peer companies. JDS Uniphase added 4.9 percent to $13.98 while Juniper Networks rose 4.7 percent to $18.84.
The sector also received a boost from Facebook, which jumped 3.7 percent to $27.57.
The minutes from the Federal Reserve’s most recent policy-setting meeting showed a few policy makers expected to taper the pace of its purchases of Treasury and mortgage-backed securities by midyear and end them later this year, while several others expected to slow the pace a bit later and halt this quantitative easing program by year-end.
Accommodative monetary policy from the Fed has been credited with helping to push up stock prices.
“The only way quantitative easing will be tapered off is if the labor market shows noticeable improvement, and the most recent data doesn’t show that,” said Mr. McDonald of Northern Trust, referring to the March employment report, which fell sharply short of expectations.
“Q.E. will only be taken away when we’re in a self-sustaining recovery,” he said. “We’re not there yet, which points to the Fed continuing to stimulate the economy.”
Among the 5 percent of S. P. 500 companies that have reported their quarterly financial results so far, almost three-quarters have topped expectations, according to Thomson Reuters data.
But quarterly profits are expected to grow just 1.5 percent from a year earlier, down from a January estimate of 4.3 percent.
Family Dollar Stores reported weaker-than-expected earnings, but its stock rose 1.1 percent to $60.44.
Health Management Associates cut its outlook for 2013 earnings and revenue, citing weak patient-admission figures in the first quarter of the year. Its stock plummeted 16.4 percent to $10.53.
In the bond market, interest rates moved higher. The price of the Treasury’s 10-year note declined 16/32, to 101 24/32, while its yield rose to 1.81 percent, from 1.75 percent late Tuesday.
Article source: http://www.nytimes.com/2013/04/11/business/daily-stock-market-activity.html?partner=rss&emc=rss