S&P 500 scores first close above 2,000; data helps

NEW YORK Tue Aug 26, 2014 4:48pm EDT

Traders work on the floor of the New York Stock Exchange (NYSE) February 10, 2014.   REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange (NYSE) February 10, 2014.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - U.S. stocks edged higher on Tuesday to lift the S&P 500 just a hair above the 2,000 mark, its first close above that milestone, after data that pointed to a brighter future for the economy.

Energy shares, which closely track the pace of growth, led the day's gain. The S&P energy index rose 0.5 percent and ranked as the best performer of the 10 major S&P sectors.

The S&P 500 hit an intraday high of 2,005.04, climbing above the 2,000 mark for the second straight day. On Monday, though, the benchmark could not hold on to that mark and ended at 1,997.92. With Tuesday's move, both the Dow and the S&P 500 have risen in 10 of the past 13 sessions, while the Nasdaq is up for 11 of the past 13 sessions.

However, much of the market's recent gains have come on low volume, suggesting that many traders may be reluctant to jump in at current levels.

"We will have to wait and see. Volume this week is very light; we have a lot of people still on vacation. But economically and fundamentally, it is a good picture," said Jeff Kravetz, regional investment director at U.S. Bank Wealth Management in Phoenix.

U.S. consumer confidence rose more than expected in August, climbing to its highest since October 2007, according to the Conference Board, an industry group. The Commerce Department reported that U.S. durable goods orders jumped 22.6 percent in July, the biggest gain on record, though the number was skewed by strong international demand for aircraft.

"Even though that (durables) number is lopsided and kind of skews the picture, when you have more aircraft orders and auto sales, in the long run, those are positives. That shows the economy is recovering and there are some good prospects," Kravetz said.

The market's trend higher is still seen as intact. The S&P 500's price-to-earnings ratio is within historical norms, leading many analysts to believe stocks are not overvalued. Nonetheless, further pronounced gains may be a challenge because of potential headwinds such as a reduction in Federal Reserve stimulus and a simmering conflict between Ukraine and Russia.

The Dow Jones industrial average rose 29.83 points or 0.17 percent, to end at 17,106.70. The S&P 500 gained 2.10 points or 0.11 percent, to close at 2,000.02, a record high. The Nasdaq Composite added 13.29 points or 0.29 percent, to finish at 4,570.64.

The Dow industrials had touched a record intraday high of 17,153.80 during Tuesday's session.

Best Buy Co Inc shares slid 6.9 percent to $29.80 after the electronics retailer reported second-quarter revenue that missed expectations and forecast a drop in same-store sales in the second half of the year. But DSW Inc jumped 9.2 percent to $30.99 after the shoe and accessory retailer's adjusted quarterly earnings topped forecasts.

Digital Ally Inc extended its meteoric rise, surging another 14.2 percent to $14.28 on heavy volume. The recent fatal police shooting of an unarmed black teenager in Missouri has fueled interest in the company's wearable camera, and the stock's price has nearly quadrupled this month alone.

Amazon.com Inc agreed late Monday to buy live-streaming gaming network Twitch Interactive for about $970 million in cash. Amazon's stock rose 2.3 percent to $341.83 and gave the biggest boost to the Nasdaq 100 index.

Volume was light, with about 4.25 billion shares traded on U.S. exchanges, well below the 5.44 billion average so far this month, according to data from BATS Global Markets.

Advancing stocks outnumbered declining ones by a ratio of about 2 to 1 on both the New York Stock Exchange and the Nasdaq.

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Comments (7)
keebo wrote:
What happens to a market when buyers dry-up?

Aug 26, 2014 8:13am EDT  --  Report as abuse
GFY365 wrote:
I wouldnt worry about that keebo. Amazing as it may seem, 83% of the total shares in the market are actually owned by the top 1%. They are making a fortune as the market rises and falls. A major maket drop is nothing more than a opportunity to buy.

Aug 26, 2014 11:28am EDT  --  Report as abuse
The real economy has nothing to do with Wall Street now, if it ever did. Main street is hurting, Wall Street billionaires are happy though, and that is the only thing that matters to our political class with their crooked so called leadership PACs, and the hidden contributions by the billionaires…hey, what happened to the disclosure so highly touted by the court when they handed us the citizens united decision? And consumer sentiment is up? What nonsense. Wages have stagnated for years as inflation slowly creeps up.

Aug 26, 2014 3:20pm EDT  --  Report as abuse
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