S&P 500 Sets New Record High CloseOliver Renick
The Standard & Poor’s 500 Index closed at an all-time high, halting a three-session slide, as Microsoft Corp. and Apple Inc. led a rally in technology shares and the weaker dollar spurred gains in multi-national companies.
Microsoft and Apple added at least 2.3 percent, while the Nasdaq Internet Index jumped 1.6 percent. Computer Sciences Corp. gained 4.3 percent after a report that the company plans to split in two. Consumer staples and health-care companies in the S&P 500 advanced more than 1.4 percent. Kohl’s Corp. tumbled 13 percent after quarterly sales missed forecasts.
The S&P 500 Index rose 1.1 percent to 2,121.10 at 4 p.m. in New York, as the gauge erased this week’s decline. The Dow Jones Industrial Average climbed 191.75 points, or 1.1 percent, to 18,252.24. The Nasdaq Composite Index advanced 1.4 percent. About 6 billion shares traded hands, 6 percent below the three-month average.
“The bond markets are stabilizing and jobless claims were positive, so it’s giving a more positive spin to the day today,” said Anwiti Bahuguna, senior portfolio manager at Columbia Threadneedle Investments. “Modest growth with low inflation doesn’t call for the Fed to react, and the equities markets like that.”
The S&P 500 posted its first gain this week after ending little changed on Wednesday amid weaker-than-forecast retail sales and as corporate-deal activity was overshadowed by concern a fixed-income selloff was not done.
The dollar is on track for its longest weekly losing streak since October 2013, amid signs the U.S. economy is struggling to gather strength, bolstering the case for keeping interest rates lower for longer. A weaker dollar lessens the drag on the economy and corporate profits as exports become more competitive and imports less attractive to consumers.
Jobless claims decreased to 264,000, below the 273,000 projected by economists surveyed by Bloomberg. The four-week average was the lowest since April 2000. A separate report showed wholesale prices in the U.S. unexpectedly declined in April from the prior month, indicating inflation is well-contained as Federal Reserve officials weigh when to raise the benchmark interest rate.
Concern the Fed would raise interest rates even with worsening economic data and predictions for earnings declines have whipsawed stocks between gains and losses in the past six weeks. The benchmark jumped the most since March on Friday as data showed hiring bounced back in April, then retreated 0.8 percent through Wednesday amid a selloff in global bond markets.
“The dollar’s getting a little bit weaker and the bond market is actually rallying a bit as opposed to what’s been happening for the most of the past few weeks,” said Mark Kepner, an equity trader at Themis Trading LLC, in Chatham, New Jersey. “The jobless claims numbers were also good, and continue to show the job market is getting better, while PPI numbers didn’t show any worries about inflation.”
Chicago Board Options Exchange Volatility Index fell 7.4 percent to 12.74. The gauge, known as the VIX, is on track for its first weekly drop in three weeks.
All the S&P 500’s 10 main groups gained, led by technology, consumer staples and health-care companies. Microsoft, Apple and Facebook Inc. all rallied more than 2.3 percent to boost the tech group to its highest level since Sept. 2000. Adobe Systems Inc. added 3.1 percent to its highest in two months.
Facebook climbed 3.7 percent, the most since October. The jump added to a 1.3 percent gain yesterday, after the company reached a deal with New York Times Co. and eight other media outlets to post stories directly to the social network’s mobile news feed.
Consumer companies that draw significant sales and profits from overseas rallied amid the dollar’s retreat. Altria Inc. advanced 3.1 percent, the most since Jan. 2013. Spirits maker Brown-Forman Corp. and Coca-Cola Enterprises Inc. added more than 2.2 percent.
Health-care shares in the benchmark index rose for the first time this week, paced by gains in device makers Boston Scientific Corp. and St. Jude Medical Inc., which rallied at least 3.8 percent. Johnson & Johnson and Pfizer Inc. climbed more than 1.2 percent.
Royal Caribbean Cruises Ltd. jumped 3.8 percent to lead an advance in consumer discretionary shares amid a retreat in oil and the dollar. The cruise line’s shares hit their highest level since it cut its profit forecast on April 20, when it blamed fuel prices and a stronger dollar.
Avon Products Inc. closed 6 percent higher, after jumping nearly 20 percent as a purported takeover offer turned out to be a hoax.
Retailers lagged for a second day after Wednesday’s disappointing April sales report and Kohl’s weaker-than-forecast sales results today. Kohl’s shares fell the most ever, down 13 percent. Target Corp. lost 3.2 percent to a two-month low, while Best Buy Co. Inc. slid 3.8 percent.
Harley-Davidson Inc. dropped for a fourth consecutive day, down 2.1 percent to its lowest level since 2013. Shares have fallen more than 17 percent this year.
Energy companies in the benchmark index were little changed as oil prices retreated. Transocean Ltd. and Noble Corp. lost more than 2.7 percent, while Tesoro Corp. and Valero Energy Corp. gained at least 2.5 percent.
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