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Portfolio > Economy & Markets > Stocks

S&P Cracks 1,400 for First Time Since 2008

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NEW YORK (AP) — 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.


AP Business Writer Daniel Wagner in Washington contributed to this report.


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