S&P 500 touches another milestone
Summer doldrums? Not on Wall Street. The stock market notched another first on Monday as the Standard & Poor's 500 index nudged briefly past the 2,000-point mark and closed with its second record high in a week.
The move was the latest milestone in a five-year rally for U.S. stocks, which are enjoying a late-summer revival after dipping earlier this month on concerns about geopolitical tensions in Russia and the Middle East.
Investors have put aside those concerns for now, focusing instead on the improving outlook for the U.S. economy, rising earnings and corporate deals.
News on Monday that Burger King was in talks to acquire doughnut chain Tim Hortons and create a new holding company headquartered in Canada had stocks pointing higher in premarket trading. That built on word over the weekend that California biotech company InterMune agreed to sell itself to Swiss pharmaceutical company Roche for $8.3 billion. Some other names in biotech also got a boost from the deal.
The deals overshadowed disappointing news in the housing market.
Shortly after the market opened, the Commerce Department reported that sales of new homes slid 2.4 percent last month. Homebuilder stocks declined, but the losses didn't spread to the broader market. In fact, stocks did the opposite.
The S&P 500, a widely followed barometer of the stock market, crossed above 2,000 in the first hour of trading.
The index fluctuated above and below the milestone throughout the day and ended just below that mark.
"The index number itself is somewhat symbolic," said David Kelley, JPMorgan Funds' chief global strategist. "It's a continuation of what we've seen all year."
All told, the S&P 500 added 9.52 points, or 0.5 percent, to 1,997.92. It closed at a record last Thursday of 1,992.37.
The Dow Jones industrial average rose 75.65 points, or 0.4 percent, to 17,076.87. The Nasdaq composite gained 18.80 points, or 0.4 percent, to 4,557.35.
The major U.S. indexes are riding a three-week streak of weekly gains and are up for the year.
Stocks, with support from the Federal Reserve's easy-money policies, have been on a bull run for more than five years after the market bottomed out during the Great Recession in March 2009.
"Unless the story changes, the stock market is going to get pushed higher by the lack of potentially good returns elsewhere," Kelley said.
Corporate deals have been a recurring driver of the market this year. Investors seized on the trend on Monday, sending Burger King up 19.5 percent. The stock added $5.29 to $32.40.
InterMune, meanwhile, vaulted 35.4 percent. It climbed $19.05 to $72.85.
The parent company of the Ann Taylor and Loft clothing chains also got a boost on news that a big shareholder is pressuring management to explore selling the company. Ann rose $2.42, or 6.4 percent, to $39.94.
Among other stocks making big moves, GrubHub fell $3.60, or 8.4 percent, to $39.16 after it disclosed that it may sell 10 million shares. The online restaurant delivery service had its initial public offering last year.
While stocks are riding high this summer, investors are still looking for signs that U.S. consumers are in a spending mood.
The market should get some fresh insight on Tuesday, when the government reports data on consumer confidence, home prices and durable goods.
"Are people who are getting employed actually spending on bigger-ticket items? That becomes the big test," said JJ Kinahan, chief strategist at TD Ameritrade.
Bond prices rose. The yield on the 10-year Treasury note slipped to 2.38 percent from 2.40 percent late Friday.
Benchmark U.S. crude for October delivery fell 30 cents to $93.35 a barrel in New York. In metals trading, gold fell $1.30 to $1,278.90 an ounce, silver fell three cents to $19.36 an ounce and copper edged up a penny to $3.22 a pound.
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