S&P 500 posts highest close in nearly four years
Traders work on the floor of the New York Stock Exchange February 21, 2012. — Reuters pic NEW YORK, Feb 25 — The S&P 500 rose yesterday to close at the highest level since before the collapse of Lehman Brothers in 2008, continuing a pattern of steady gains on signs of US economic recovery.
The broad index has risen more than 8 per cent this year, a rally built on a succession of modest gains, with only a handful of losses, none greater than a 0.7 per cent drop.
Many analysts still expect a more significant pullback, but worries about an impending correction have been blunted by a string of upbeat economic reports.
Yesterday’s positive data included a better-than-expected report on consumer confidence in February and new-home sales last month that exceeded economists’ forecasts.
“We’re grinding higher, but it doesn’t seem like there’s a whole lot of conviction on either side,” said Brian Lazorishak, portfolio manager at Chase Investment Counsel in Charlottesville, Virginia.
The lack of conviction could be seen in the recent low volumes. An average 6.4 billion shares changed hands daily on the NYSE, NYSE Amex and Nasdaq this week, compared to a 7.81 billion daily average during February 2011.
Volatility has also remained low, with the CBOE volatility index down about 11 per cent so far this month.
The Dow Jones industrial average dipped 1.74 points to close flat at 12,982.95. The S&P 500 Index gained 2.28 points, or 0.17 per cent, to 1,365.74. The Nasdaq Composite rose 6.77 points, or 0.23 per cent, to 2,963.75.
For the week, the Dow and S&P rose about 0.3 per cent and the Nasdaq added 0.4 per cent to close at its highest since mid-December 2000.
The S&P 500’s close was the highest since June 6, 2008, a few months before Lehman Brothers went bankrupt as the global credit crisis spiraled out of control.
The S&P 500 has struggled to climb above last year’s intraday high near 1,370. The level has thrown up strong resistance in the past week, but a break above could set the market up for more gains.
Above that level the benchmark “would not be any more overbought than it already is and may in fact bring in some technical buying,” Lazorishak said.
US consumer confidence hit its highest point in a year this month despite a strong rise in gasoline prices, while new home sales fell in January but upward revisions to prior months’ sales helped confirm the housing market is in a recovery.
Advancing stocks outnumbered declining ones on the NYSE by 1,621 to 1,361, while on the Nasdaq, decliners beat advancers 1,396 to 1,129.
According to Thomson Reuters data through yesterday morning, of the 461 companies in the S&P 500 that have reported earnings, 63.3 per cent topped expectations. That is below the 70 per cent beat rate in the past four quarters but above the average of 62 per cent since 1994.
Salesforce shares soared a day after the cloud computing applications provider posted earnings above expectations. The stock jumped 9 per cent to US$143.64 (RM433.18).
The Morgan Stanley healthcare payor index gained 1.6 per cent, with Wellcare Health Plans up 5.9 per cent to US$71.10 after a roadblock to a legal settlement was removed.
Kenneth Cole Productions surged 18.5 per cent to US$15.49 after the company’s chairman offered to take it private. — Reuters
