S&P nears its record closing mark of 1,527
NEW YORK » Wall Street extended its advance yesterday amid a burst of enthusiasm about the economy that gave the Standard & Poor's 500 index its first close above 1,500 since September 2000.
The S&P 500, the index most closely watched by market professionals, made its first foray past 1,500 shortly after trading began and rose as high as 1,503.34 just over a week after the Dow Jones industrial average passed 13,000 for the first time.
The index closed at 1,502.39, up 6.47, or 0.43 percent, and is now within striking distance of its closing high of 1,527.46, set March 24, 2000, just as the dot-com bubble began to burst and Wall Street began a three-year-long decline.
The Dow, meanwhile, had its third straight record-high close.
Stocks have soared in recent weeks as first-quarter earnings beat reduced expectations, and upbeat economic news added to the gains.
With the Dow having piled on more than 700 points in April alone, there are concerns that investors may be getting a little too enthusiastic given the uncertainty in the housing market and other sectors of the economy.
Yesterday, the good news was about inflation: The U.S. Labor Department said wages, as measured by unit labor costs, rose at a tepid 0.6 percent rate in the first quarter. The news fed Wall Street's hopes for an interest rate cut later this year.
Perhaps giving the S&P 500 its final push, the Institute for Supply Management said its index of non-manufacturing business rose to 56.0 in April from 52.4.
"You're seeing some vertigo out there, the fear we're getting ahead of ourselves," said Arthur Hogan, chief market analyst at Jefferies & Co. "There's going to be natural trepidation at new levels, but you rationalize these levels in knowing that we haven't overextended ourselves like we were in 1999."
The Dow Jones rose 29.50, or 0.22 percent, to 13,241.38. The blue chip index has now hit 18 record closes since the start of the year and 40 since the beginning of October. The Dow's climb in 22 of the past 25 sessions marks the blue chip average's longest advance since 1955.
The Nasdaq composite index rose 7.62, or 0.30 percent, to 2,565.46.
Bonds fell yesterday following the economic data; the yield on the benchmark 10-year Treasury note rose to 4.67 percent from 4.65 percent late yesterday.
Light, sweet crude fell 49 cents to $63.19 per barrel on the New York Mercantile Exchange.
Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange, where volume came to 1.59 billion shares, up from 1.50 billion on Wednesday.
The Russell 2000 index of smaller companies rose 0.41, or 0.05 percent, to 828.87.
Besides economic data, the parade of earnings reports continued yesterday with General Motors Corp. turning in lower first-quarter earnings. GM's profit fell 90 percent from a year earlier, which benefited from a gain. The company also suffered losses in the residential mortgage business of GMAC Financial Services. GM, one of the 30 stocks that makes up the Dow industrials, fell $1.75, or 5.4 percent, to $30.69.