* Dow and S&P 500 climb to record highs, banks rally
* Nasdaq ends at highest level in 12-1/2 years
* Bank of America helps lead Dow higher
* Dow up 0.8 pct, S&P 500 up 1 pct, Nasdaq up 0.7 pct
By Leah Schnurr
NEW YORK, May 14 U.S. stocks rallied to fresh
highs on Tuesday as investors picked up large-cap companies'
shares on the expectation that central bank stimulus will help
propel the rally further.
Gains were broad, but growth sectors outperformed their
peers with bank stocks leading the way. Bank of America,
up 2.8 percent at $13.34, was the Dow's biggest percentage
gainer, while Citigroup Inc rose 2.4 percent to $50.09.
Wall Street has rallied without a significant correction
since the start of the year, pushing major indexes to all-time
records and pushing the S&P 500 up almost 16 percent for 2013 so
The ascent has been driven in large part by the Federal
Reserve's easy monetary policy, designed to stimulate the
economy, though investors' focus has turned to when the Fed may
start to rein in its bond-purchase program.
"The developed economies of the world are all easing
aggressively, the money is looking for a home, and it's ending
up in the stock markets," said Bucky Hellwig, senior vice
president at BB&T Wealth Management in Birmingham, Alabama.
For now, investors are betting that the central bank will be
careful not to remove its support too soon in order to not
disrupt the economic recovery it is trying to foster, Hellwig
So far, declines in the market have been met with buying and
investors are trying to gauge how long that can last.
"People are indeed trying to participate in the rally, but
at the same time, they're trying to be cautious," said Brad
McMillan, chief investment officer of Commonwealth Financial,
based in Waltham, Massachusetts.
The S&P 500 financial sector index rose 1.7 percent,
while the S&P transports group index gained 1.4 pct.
The Dow Jones industrial average gained 123.57
points, or 0.82 percent, to a record 15,215.25 at the close. The
Standard & Poor's 500 Index rose 16.57 points, or 1.01
percent, to end at a record 1,650.34. The Nasdaq Composite Index
climbed 23.82 points, or 0.69 percent, to 3,462.61, its
highest close since November 2000.
During the session, the Dow hit an all-time intraday high of
15,219.55, while the S&P 500 climbed to an all-time intraday
high of 1,651.10.
The Nasdaq touched a fresh 52-week high of 3,468.67.
The market had traded sideways for the past three sessions,
showing a gain of just 0.07 percent as the winding down of the
quarterly earnings season and a light economic calendar have
left investors without a strong catalyst for further gains.
The Dow's gains were limited by weakness in Intel Corp
, down 1 percent at $23.84, and UnitedHealth Group
, off 1.1 percent at $61.73.
U.S.-listed shares of Sony Corp jumped 9.9
percent to $20.76 after billionaire hedge fund investor Daniel
Loeb called on the company to spin off its lucrative
Nokia Corp unveiled a new version of its Lumia
smartphone line, but U.S.-listed shares fell 5.2 percent to
$3.64. Research company Gartner said Nokia lost 5 percentage
points of market share in the first quarter, falling to 14.8
Solar power companies' shares fell after Trina Solar Ltd
estimated lower panel shipments than a previous outlook
and said its results would be hurt by a foreign currency
exchange loss. The stock fell 8.8 percent to $5.41, while Yingli
Green Energy slid 6.3 percent to $2.36.
Most corporate earnings have been better than expected this
quarter. With 90 percent of the S&P 500 companies having
reported results so far, 67.2 percent have topped earnings
expectations, according to Thomson Reuters data, which is even
with the average over the past four quarters. However, only 46.9
percent have beaten revenue expectations, below the 52 percent
average over the past four quarters.