S&P 500 at new record on solid earnings, economic data
In this Jan. 14, 2014, file photo, trader Richard Newman works on the floor of the New York Stock Exchange. US stock markets rose Wednesday Jan. 15, as an upbeat World Bank assessment of the global economic outlook underpinned buying spurred by stronger US retail sales. AP
NEW YORK—The S&P 500 Wednesday closed at a new record following a batch of mostly solid economic and corporate earnings reports, and a modestly upbeat Federal Reserve report.
The S&P 500 jumped 9.50 (0.52 percent) to 1,848.38, edging past the prior record of 1,848.36.
The Dow Jones Industrial Average gained 108.08 (0.66 percent) to 16,481.94, while the tech-rich Nasdaq Composite Index increased 31.87 (0.76 percent) to 4,214.88.
Peter Cardillo, chief market economist at Rockwell Global Capital, said the Federal Reserve’s “Beige Book” survey pointed to stronger economic conditions throughout the US.
Cardillo also cited a report from the New York Federal Reserve bank that showed rising manufacturing activity in New York state. The World Bank also upgraded its 2014 economic growth forecast.
Stocks are rising due to “an improving economy, good prospects for earnings season and a theme that there is still no place to put your money” outside of equities, Cardillo said.
Bank of America rose 2.3 percent after reporting an eightfold increase in quarterly earnings as set-asides for reserves fell due to improved credit quality. The US banking giant earned 29 cents per share, up 3 cents from analyst forecasts.
Other leading banks also rallied on better sentiment toward the sector, including Dow component JPMorgan Chase (+3.0 percent), Wells Fargo (+1.8 percent) and Citigroup (+1.9 percent).
General Motors fell 1.6 percent after forecasting “modest” global industry growth in 2014 and projecting a big rise in restructuring costs. The US auto giant announced late Tuesday that it would pay its first corporate dividend since the 2008 government rescue on March 28.
Apple rose 2.0 percent as it prepared to market iPhones to more Chinese consumers following a major deal with China Mobile. Chief executive Tim Cook told news outlets the launch was a “watershed moment” for the company.
Separately, Apple agreed to refund at least $32.5 million to US customers for children’s purchases from its online App Store without parental consent in a settlement with the Federal Trade Commission.
Bond prices fell slightly. The yield on the 10-year US Treasury rose to 2.88 percent from 2.87 percent, while the 30-year rose to 3.81 percent from 3.80 percent. Bond prices and yields move inversely.
