US stocks surged higher Tuesday as favorable sentiment towards equities more than compensated for a mixed bag of economic indicators.
The Dow set a new record while the S&P 500 narrowly missed, coming within 2 points of its October 2007 all-time high.
The Dow Jones Industrial Average jumped 111.90 (0.77 percent) to 14,559.65, breaking the previous mark of March 14.
The S&P, which measures a broad base of equities in all major economic sectors, shot up 12.08 (0.78 percent) to 1,563.77, just short of its all-time closing high of 1,565.15.
The tech-heavy Nasdaq Composite Index rose 17.18 (0.53 percent) to 3,252.48.
The gains came after a mixed array of economic data. US durable goods orders for February rose solidly on mainly aircraft orders, and the S&P/Case-Shiller Home Price index showed prices rose 8.1 percent for 20 leading cities for the 12 months to January, the highest year-over-year increase since mid-2006.
But the Conference Board index of consumer confidence dropped 8.3 points to 59.7, weakened by concerns over federal budget cuts.
The rise in stocks to fresh record levels is like a “self-fulfilling prophesy,” said Sam Stovall, chief investment strategist for Standard & Poor’s.
“There are an awful lot of people on the sidelines who would like to have more exposure to equities,” Stovall said.
On the Dow, Hewlett-Packard gained 2.3 percent, and Boeing added 2.1 percent after announcing that the first test flight of its troubled 787 aircraft went according to plan.
Boeing is hoping a second flight soon will get its battery fix approved so the grounded aircraft can return to service.
Chipmaker Intel gained 2.9 percent on reports that it is making progress in talks with entertainment companies to provide content for an online pay-TV service.
Berkshire Hathaway gained 1.4 percent following a deal on its Goldman Sachs warrants that will leave it one of the investment bank’s 10 biggest shareholders without having to pay anything.
The Children’s Place Retail Stores, which sells children’s clothing, fell 3.2 percent after slashing its sales forecast due to “unfavorable weather and weak macro-economic” conditions that limited consumer spending.
Ziopharm Oncology, a biopharmaceutical company focused on new cancer therapies, sank 64.5 percent after its most advanced product fell short of expectations in a trial.
Bond prices rose. The yield on the 10-year Treasury fell to 1.91 percent from 1.92 percent late Monday, while the 30-year dropped to 3.13 percent from 3.14 percent. Bond prices move inversely to yields.
Source: AFP
