S&P cracks 1,400 for first time since 2008

Trader Mar­shall Ryan, cen­ter, works on the floor of the New York Stock Exchange Thurs­day. Stocks recorded small gains Thurs­day after a pair of pos­i­tive eco­nomic reports. (AP Photo/Richard Drew)

SAMANTHA BOMKAMP

AP Busi­ness Writer

NEW YORK — The stock mar­ket cleared another bar­rier Thurs­day in its long recov­ery from the Great Reces­sion: The Stan­dard & Poor’s 500 index closed above 1,400 for the first time since June 2008.

The Dow Jones indus­trial aver­age, dri­ven higher like the rest of the mar­ket by more good eco­nomic news, set a four-year high. It climbed 58.66 points to fin­ish at 13,252.76, its high­est close since the last day of 2007.

It was the sev­enth gain in a row for the Dow, the longest streak since Feb­ru­ary 2011.

The gov­ern­ment said appli­ca­tions for unem­ploy­ment ben­e­fits fell last week to 351,000, match­ing a four-year low. When appli­ca­tions stay below 375,000, it usu­ally sig­nals that hir­ing is strong enough to lower the unem­ploy­ment rate.

Opti­mism about the job mar­ket and the broader eco­nomic recov­ery has dri­ven stocks steadily higher all year. The S&P is up more than 11 per­cent, beat­ing its per­for­mance for an aver­age year, and the Dow is up more than 8 percent.

Employ­ers have added an aver­age 245,000 jobs each month since December.

“We’ve been sput­ter­ing for the last cou­ple of days, but now we’re see­ing those strong jobs num­bers really drive the mar­ket higher,” said Joe Bell, senior equity strate­gist at Schaeffer’s Invest­ment Research.

A sep­a­rate report Thurs­day showed that prices paid by whole­salers rose less than expected in Feb­ru­ary, despite a spike in gaso­line prices. The pro­ducer price index has increased 3.3 per­cent in the past year, the small­est gain since August 2010.

The S&P fin­ished at 1,402.60, up 8.32 points. The close put it about 107 points shy of its record, 1565.15, set in Octo­ber 2007. And the index, the broad­est of the three major mar­ket gauges, sug­gests stocks are still inex­pen­sive by his­tor­i­cal standards.

The S&P trades at about 14.5 times the past year’s earn­ings for its 500 com­pa­nies, com­pared with a his­tor­i­cal aver­age of 15. It’s not unusual for stocks to trade higher than the long-term aver­age and for many years at a time.

The index is up 107 per­cent since its low dur­ing the Great Reces­sion in March 2009.

Nine of the 10 indus­try groups in the S&P fin­ished higher, led by finan­cial stocks, which gained 1.9 per­cent as a group. Util­ity stocks, tra­di­tion­ally sought by investors with lit­tle tol­er­ance for risk, were the only group to fall.

CSX Corp., the rail­road com­pany, jumped 8.5 per­cent after its chief finan­cial offi­cer said at a con­fer­ence that the com­pany expects the improv­ing econ­omy to drive record first-quarter earnings.

CSX was the best-performing stock in the S&P 500, and the Dow Jones trans­porta­tion aver­age gained 3.3 per­cent, its best day of the year. Two other rail­road stocks, Nor­folk South­ern and Union Pacific, gained 5 per­cent apiece.

The Nas­daq com­pos­ite index climbed 15.64 points to close at 3,056.37. It has gained 17 per­cent this year, eas­ily beat­ing the Dow and S&P, and is trad­ing at lev­els last seen in Decem­ber 2000.

Apple cleared $600 per share for the first time on the day before the release of its lat­est iPad tablet. The stock fell back and closed at $585.56, down 0.7 per­cent for the day. Apple ended last year at $405.

The price of oil dropped almost $2 per bar­rel in min­utes after a report just before noon that the United States and Britain had agreed to release oil from emer­gency reserves.

The White House later said those reports were inac­cu­rate, and oil prices recov­ered. Oil closed at $105.11 per bar­rel in New York, down 32 cents for the day.

U.S. Trea­sury yields held their five-month highs. The yield on the bench­mark 10-year note rose to 2.28 per­cent, from 2.27 per­cent Wednes­day. Bond prices have fallen as investors move money into stocks and bet on the eco­nomic recovery.

Gold rose $15.70 to $1,658.50 an ounce. The euro gained half a penny against the dol­lar to $1.309.

In Asia, mar­kets mostly fell after Chi­nese Pre­mier Wen Jiabao said curbs that have slowed a run-up in hous­ing prices will remain in place, despite fears that the effort could con­tribute to the nation’s eco­nomic slowdown.

The bench­mark Shang­hai Com­pos­ite Index lost 0.7 per­cent. But Hong Kong’s Hang Seng closed 0.2 per­cent higher, and Japan’s Nikkei index rose 0.7 per­cent as the yen con­tin­ued to decline from record highs against the U.S. dollar.

Mar­kets in Europe ended mostly higher. Britain’s FTSE 100 index fell 0.1 per­cent, but France’s CAC 40 index gained 0.4 per­cent, Germany’s DAX index gained 0.9 percent.

Among other U.S. stocks mak­ing big moves on Thursday:

— Cisco Sys­tems Inc. slipped 1.4 per­cent after it announced a $5 bil­lion deal to buy NDS Group Ltd., a video tech­nol­ogy com­pany, from News Corp. Shares of News Corp., which owns Fox News Chan­nel and The Wall Street Journal,sears edged higher.

— AMC Net­works, a spin­off of Cable­vi­sion that owns the cable net­works AMC, IFC and Sun­dance Chan­nel, dropped 4.4 per­cent after its fourth-quarter earn­ings fell short of Wall Street estimates.

— Gold­man Sachs, the invest­ment bank, rose 2.2 per­cent. It fell 3.4 per­cent Wednes­day, when a young banker pub­lished a res­ig­na­tion essay in The New York Times accus­ing the bank of los­ing its moral fiber.

Posted by AP News on Mar 15 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.