Dow, S&P close at record highs as Wall Street rallies
NEW YORK (Reuters) - Stocks climbed 1 percent on Wednesday, with both the Dow and S&P 500 ending at historic highs as cyclical shares led the way higher for a second straight day.
The S&P 500 finally joined the new all-time intraday high club, surging past a record set on October 11, 2007. The index has struggled to breach the level of 1,576.09 for the past several weeks, but broke above it on Wednesday to rise as high as 1,589.07. The Dow also hit another intraday milestone, rising as high as 14,826.66.
"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 Chicago-based Northern Trust Global Investments, which has about $760 billion in assets under management.
Gains were broad, with all but two of the S&P 500's 10 primary sectors up more than 1 percent. More than three-fourths of stocks traded on the Nasdaq ended higher, while 73 percent of New York Stock Exchange-listed shares did.
In another encouraging sign, volume was higher than it has been recently, with about 6.24 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT. However, volume remained below the daily average so far this year of about 6.36 billion shares.
With the day's gains, major indexes are up about 10 percent for the year, but many investors viewed the strength in cyclicals - groups closely tied to the pace of economic growth - as a sign that the rally still has staying power. The Dow Jones Transportation Average .DJT, viewed as a leading indicator for the broader market, rose 1.8 percent.
Tech was the day's strongest group, with the S&P technology sector index .SPLRCT up 1.8 percent. The group was lifted by strong results at Adtran Inc (ADTN.O), which jumped 14 percent to $22.46 and boosted the shares of its peer companies. JDS Uniphase Corp (JDSU.O) added 4.9 percent to $13.99 while Juniper Networks Inc (JNPR.N) rose 4.7 percent to $18.84.
The sector also got a boost from Facebook Inc (FB.O), which jumped 3.7 percent to $27.57.
The Dow Jones industrial average .DJI jumped 128.78 points, or 0.88 percent, to 14,802.24 at the close. The Standard & Poor's 500 Index .SPX climbed 19.12 points, or 1.22 percent, to 1,587.73. The Nasdaq Composite Index .IXIC shot up 59.40 points, or 1.83 percent, to close at 3,297.25.
The day marked the best session for both the Dow and the S&P 500 since February 27, and the best for the Nasdaq since January 2. The Nasdaq climbed to a session high of 3,299.15, its highest 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 in Greenwich, Connecticut. "By definition, there is no more resistance for the S&P now that we're at new highs."
The CBOE Volatility index .VIX, a measure of investor anxiety, fell 3.7 percent.
Stockton added that if the S&P 500 held above its old high, "the next target would be 1,780."
The Federal Reserve unexpectedly released the minutes from its most recent policy-setting meeting five hours early. The minutes showed a few policymakers expected to taper the pace of asset purchases by mid-year and end them later this year, while several others expected to slow the pace a bit later and halt the quantitative easing program by year-end.
Accommodative monetary policy from the Fed has been credited with helping to boost equity prices, and uncertainty surrounding the minutes briefly hit indexes in the premarket session, though they subsequently recovered.
"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 Northern Trust's McDonald, referring to the March payroll report, which fell sharply short of expectations.
"QE will only be taken away when we're in a self-sustaining recovery. 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 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 ago, down from a January estimate of 4.3 percent. The lowered expectations could make it easier for companies to beat analysts' estimates and propel the market further.
Family Dollar Stores (FDO.N) reported weaker-than-expected earnings, but rebounded off earlier declines to rise 1.1 percent to $60.44.
Hospital operator Health Management Associates Inc HMA.N cut its outlook for 2013 earnings and revenue, citing weak patient-admission figures in the first quarter of the year. The stock plummeted 16.4 percent to $10.53.
(Editing by Jan Paschal)
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