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Life insurers ride S&P 500 record high as small caps advance

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(Bloomberg) – Shares of major life insurers and other U.S. stocks rose, with the Standard & Poor’s 500 Index climbing to an all-time high, as health-care companies rallied and small-cap shares rebounded from yesterday’s declines.

The S&P 500 rose 0.4 percent to 2,048.93 at 10:05 a.m. in New York. The Dow Jones Industrial Average increased 41.90 points, or 0.2 percent, to 17,689.65. The Russell 2000 Index of small-cap shares added 0.9 percent. Trading in S&P 500 companies was 14 percent below the 30-day average.

Among life insurers, Ameriprise Financial edged up 1.33 points to $130.30 as of 11:00 am EST. Principal Financial Group Inc. hit 53.26, up 0.43 points. Prudential gained 0.80 points to $84.58. And Voya Financial’s shares reached $41.47, a rise of 0.63 points.

The S&P 500 has rallied to records as better-than-expected earnings and economic data have increased confidence that the U.S. economy is able to weather a global slowdown even as the Federal Reserve winds down its stimulus program.

“People are happy the market is at all-time highs, but they are still nervous,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said by phone. “Going into next year, will the market be able to maintain these gains and go higher given the cautiousness from Europe and Asia?”

The equity benchmark has rebounded 10 percent from a six- month low in October and is trading at 17.1 times the projected earnings of its members, the highest multiple since 2009. JPMorgan Chase & Co. yesterday told investors to dump U.S. equities in favor of their European counterparts because of relative valuations.

The S&P 500 has closed the past five days with a move of less than 0.1 percent in either direction, while volatility has plunged from a two-year high last month to its 12-month average.

Small-cap shares have been more active. The Russell 2000 Index dropped as much as 1.9 percent from a four-month high reached Nov. 12, before rallying today. The measure slipped 0.8 percent yesterday as concern over a recession in Japan offset corporate deals.

Data today showed wholesale prices unexpectedly increased in October as higher costs for services and food outweighed a slump in energy. The 0.2 percent advance in the producer-price index followed a 0.1 percent drop the prior month, the Labor Department report showed. The median estimate in a Bloomberg survey called for a 0.1 percent decline.



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