* Biotechs lead S&P above milestone 2,000
* Hope for European stimulus lifts financials
* Data on service sector, housing market below forecasts
* Indexes up: Dow 0.7 pct, S&P 0.7 pct, Nasdaq 0.6 pct
(Updates to midday trading, adds context on S&P record)
By Ryan Vlastelica
NEW YORK, Aug 25 The S&P 500 vaulted above 2,000
for the first time on Monday, with financials and biotechnology
stocks lifting the benchmark index to a new record as investors
bet on equities as a preferred asset over bonds.
The significance of the milestone was more psychological
than fundamental, and it represents the cumulation of a six-year
rally that has boosted retirement accounts for Americans from
Wall Street to Main Street, though the gains have largely
benefited wealthier Americans. On a total-return basis the S&P
500 has more than tripled from its 2009 low hit during the
The day's gains were broad, with all 10 of the S&P 500's
primary sectors advancing. About two-thirds of stocks on both
the New York Stock Exchange and the Nasdaq were in positive
"The trend continues to be positive and it's like fighting a
tsunami, it keeps going and going and going and it won't stop,"
said Adam Hewison, president and chief executive at INO.com in
The advance comes amid a variety of cautious signals for the
economy, including tepid U.S. growth, waning stimulus from the
Federal Reserve and a simmering conflict between Ukraine and
Russia. In the latest economic data, reads on both the U.S.
services sector and the housing market came in below forecasts.
"All the world events are negative; people are just
shrugging them off," said Hewison. "I think we're going to
continue seeing gains."
Biotech stocks, a primary driver of recent equity gains,
continued to outperform on Monday, with the Nasdaq Biotech index
up 2.4 percent. Roche Holding AG agreed to buy
InterMune Inc for $8.3 billion in cash, the latest vote
of confidence in a sector that many, including Federal Reserve
Chair Janet Yellen, worry is overvalued.
InterMune jumped 36 percent to $73.00. Gilead Sciences
and Regeneron Pharmaceuticals were the S&P
500's top two biggest percentage gainers, both up 2.5 percent.
The Dow Jones industrial average rose 117.81 points
or 0.69 percent, to 17,119.03, the S&P 500 gained 12.94
points or 0.65 percent, to 2,001.34 and the Nasdaq Composite
added 28.52 points or 0.63 percent, to 4,567.07.
Financial shares were among the strongest of the day, rising
on expectations that Europe may see more aggressive monetary
stimulus. Morgan Stanley, which has heavy exposure to
Europe, rose 2.5 percent to $34.29 while Goldman Sachs Group Inc
, a Dow component, was up almost 2 percent at $178.90.
U.S. stocks have been strong of late. Major indexes closed a
third week of gains Friday, with the Dow and S&P enjoying their
best weeks since April.
Burger King is in talks to acquire Canadian coffee
and doughnut chain Tim Hortons Inc in a deal that would
be structured as a so-called tax inversion transaction to move
Burger King's domicile to Canada, which has lower overall
corporate taxes. Shares of Burger King jumped 17 percent to
$31.67 while U.S. shares of Tim Hortons advanced 20
percent to $75.23.
(Editing by Bernadette Baum and James Dalgleish)