Dow, S&P 500 hit records on momentum from Alibaba, Fed
Trader Peter Mancuso works on the floor of the New York Stock Exchange Thursday, Sept. 18, 2014. The Dow and S&P 500 bolted to fresh records Thursday on continued momentum from Wednesday’s Federal Reserve decision and enthusiasm ahead of Alibaba’s expected initial public offering Friday. AP PHOTO/RICHARD DREW
NEW YORK—The Dow and S&P 500 bolted to fresh records Thursday on continued momentum from Wednesday’s Federal Reserve decision and enthusiasm ahead of Alibaba’s expected initial public offering Friday.
The Dow Jones Industrial Average jumped 109.14 points (0.64 percent) to 17,265.99, its second record close in a row.
The S&P 500 gained 9.79 (0.49 percent) to 2,011.36, while the tech-rich Nasdaq Composite Index rose 31.24 (0.68 percent) to 4,593.43.
The record closes marked a continuation of the investor euphoria that set in Wednesday after the Fed signaled it would keep interest rates near zero well into 2015.
Art Hogan, chief market strategist at Wunderlich Securities, said investors were also charged up by the upcoming New York Stock Exchange launch of Chinese Internet giant Alibaba. The offering, potentially the largest IPO ever, is expected Friday.
The listing “feels as though it’s going to be a success,” Hogan said.
Positive sentiment offset caution surrounding Thursday’s Scottish independence referendum. The market has been wary of the vote because of uncertainty about how Scotland would extricate itself from the centuries-old United Kingdom.
Banking stocks, including Dow member JPMorgan Chase (+1.7 percent), Bank of America (+1.6 percent) and Citigroup (+2.4 percent), surged.
Drugstore chain Rite Aid plummeted 18.5 percent as it lowered its fiscal 2015 profit forecast due in part to reduced sales as new generic drugs replace medications with patent exclusivity.
The company projected full-year earnings of 22-33 cents per share, below the 34 cents seen by Wall Street analysts.
ConAgra Foods gained 4.6 percent as fiscal first-quarter earnings of 39 cents per share came in four cents above analyst expectations.
Pier I Imports, the furniture and housewares retailer, sank 18.5 percent as it slashed its profit forecast from $1.14-$1.22 per share to 95 cents-$1.05. The company said second-quarter sales disappointed due to soft store traffic and declines in merchandise margins due to aggressive promotions by competitors.
Bond prices were mixed. The yield on the 10-year US Treasury rose to 2.63 percent from 2.60 percent Wednesday, while the 30-year held steady at 3.36 percent. Bond prices and yields move inversely.
