Data lifts Dow to a record, S&P near record close

NEW YORK Tue Mar 26, 2013 5:55pm EDT

Traders work on the floor at the New York Stock Exchange, March 25, 2013. REUTERS/Brendan McDermid

Traders work on the floor at the New York Stock Exchange, March 25, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Stocks rallied on Tuesday, with the Dow climbing more than 100 points to another record close and the S&P 500 coming within striking distance of its all-time closing high, as strong data on home prices and manufacturing fed optimism about the economy.

The Dow Jones industrial average initially surpassed its 2007 record closing high on March 5. Since then, the Dow has reached a series of subsequent nominal record highs.

In Tuesday's session, the S&P 500 made yet another attempt at a record, but failed to break above the all-time closing high for the second day this week.

At Tuesday's close, the S&P 500 was only 1.38 points below its lifetime closing high. On Monday, the benchmark index traded just a quarter point below its record closing high, which stands at 1,565.15 set on October 9, 2007, and then retreated as investors sold some equities to cash in on gains in the wake of the news out of Europe.

Data showed U.S. single-family home prices rose in January at the fastest pace in more than six years, while long-lasting U.S. manufactured goods, also known as durable goods orders, shot up in February.

"I think the batch of data was enough to convince investors that the U.S. economy is on the right track," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co, in New York.

"At this point, it's hard to argue that anything will derail the U.S. economy, and that is boosting investors' confidence as they continue to load up on equities."

Still, investors may look for reasons to take profits, with the S&P 500 up nearly 10 percent so far this year. The rally has lifted the benchmark index near its all-time closing high, which it nearly reached on Monday.

The Dow Jones industrial average .DJI rose 111.90 points, or 0.77 percent, to end at 14,559.65, a record closing high. The Standard & Poor's 500 Index .SPX gained 12.08 points, or 0.78 percent, to finish at 1,563.77. The Nasdaq Composite Index .IXIC advanced 17.18 points, or 0.53 percent, to close at 3,252.48.

The semiconductor index .SOX climbed 0.9 percent, buoyed by Intel Corp (INTC.O) shares, up 2.9 percent at $21.77.

The CBOE Volatility Index .VIX or VIX, Wall Street's favorite barometer of investor anxiety, fell 7.1 percent to close at 12.77.

In a sign that growth continues to be slow, sales of new U.S. single-family homes fell more than expected in February, and the latest reading on consumer confidence was weaker than expected.

Shares of homebuilding stocks were mixed. Lennar Corp (LEN.N) stock rose 0.4 percent to $41.72, but Hovnanian Enterprises (HOV.N) shares slid 3.1 percent to $5.87.

But investors remained concerned about the negative implications of a financial rescue plan for Cyprus. They worried that it would serve as a template for other euro-zone economies requiring bailouts.

Banks in Cyprus will remain closed until Thursday and will then be subject to capital controls to prevent a run on deposits. President Nicos Anastasiades said late on Monday that a 10-billion-euro ($13 billion) rescue plan approved over the weekend was "painful" but essential to avoid economic meltdown.

"If there's a run on deposits, there may be a selloff (in U.S. stocks), but that could pose an excellent entry point to get into the market and take advantage of this rally," said Todd Schoenberger, managing partner at LandColt Capital, in New York.

In U.S. corporate news, Monsanto Co (MON.N) and DuPont Co (DD.N) settled a legal battle over rights to technology for genetically modified seeds. The companies agreed to drop antitrust and patent lawsuits against each other in U.S. federal court. Monsanto shares rose 4.4 percent to $103.79. DuPont, a Dow component, shed 0.3 percent to $48.97.

Netflix Inc (NFLX.O) was the S&P 500's top percentage gainer, jumping 5.4 percent to $190.61 after Pacific Crest raised its price target on the stock to $225 from $160, citing prospects for international subscriber growth.

Michael Dell's $24.4 billion buyout bid for Dell Inc DELL.O could be derailed after billionaire Carl Icahn opened the door to an alliance with Blackstone Group LP (BX.N) to take control of the computer maker from its founder. Dell dipped 0.1 percent to $14.50.

In Tuesday's session, volume was lighter than usual with some market participants absent for the observance of the Jewish holiday of Passover.

Volume was roughly 5.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 7 to 3. On the Nasdaq, seven stocks rose for every five that fell.

(Editing by Jan Paschal)

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Comments (4)
konehead wrote:
Looks to me like the all-time high for the S&P is 1576.09. Check your statement: Its record close stands at 1,565.15, set October 9, 2007.

Mar 26, 2013 1:31pm EDT  --  Report as abuse
Why_Me wrote:
The DOW is in record territory because:
a) the FED is pouring tens of billions of $ into the market every week
b) everyone who has money in Europe is pouring money out of Europe into American companies that make up the DOW
c) it is the end of Q1, all the investment dealers and managers are pumping up stocks so that they can get their bonuses at month end
Please report the truth.
Please don’t censor this comment out of existence.

Mar 26, 2013 11:47pm EDT  --  Report as abuse
caminito wrote:
Dear WHY ME:

a) The FED is not “pouring” anything in the Stock market, What the do
with the QE is maintaining the interest rates low, which has a positive influence for the stock market, as bonds are little attractive

b) Anybody in in the world, not only Europe, is pouring Money in the US markets, not only the DOW. Just today, the much more extended S&P virtually closed on a all-time high!

c) Unless January is on the end of the quarter, US stocks increased their price much more Jan 2-26 as March 1-26!!!

Who are your financial adviser?? Rand Paul and/or Mr. O’Reilly of FOX News ??

The marker reflects the fact that the world is confident in the US economy and buys also bonds and US Notes, in spite their minimal interest cost and the budget fights, showing that there is no concern regarding the managing of the US debt!!

Mar 27, 2013 1:49am EDT  --  Report as abuse
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