World Economy

S&P 500 Brushes Record High

S&P 500 Brushes Record HighS&P 500 Brushes Record High

The benchmark S&P 500 stock index brushed against its record closing high as Wall Street rallied after a much-larger-than-expected jump in jobs growth confirmed the US economy has regained speed after a first-quarter lull.

The S&P briefly traded above its record close but ended less than a point below it and was three points away from the all-time intraday high of 2,134.72 reached in May 2015, AAP reported.

On a total return basis, including reinvested dividends, the S&P 500 ended at a record high.

After a dismal payrolls report for May that raised concerns about the health of the economy, US employers added 287,000 jobs in June, beating market expectations for the first time in four months.

“The equity market is telling you the second quarter economy looks better than the first quarter,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

He said if earnings season, which begins in earnest next week, provides investors with a strong outlook, the S&P will likely break the record and has a chance at rallying from there.

“The old high has been resistance and if you break it and see earnings growth and relatively good guidance, people will probably try to get in front of that,” said Hogan.

Financial stocks on the S&P 500, which would benefit from a rate hike, gained 1.8%. Wells Fargo and JPMorgan were among the biggest boosts to the broad index, while Goldman Sachs’ 2.3% rise provided the biggest boost to the Dow.

  The ‘Fear Gauge’

The Dow Jones industrial average closed 250.86 points, or 1.4%, higher at 18,146.74; the S&P 500 gained 32 points, or 1.53%, to 2,129.9 and the Nasdaq Composite added 79.95 points, or 1.64%, to 4,956.76.

For the week, the three major indexes posted gains of more than 1%.

All major S&P 500 sectors were higher, led by gains in materials and industrials, which tend to outperform when the economy is seen expanding.

The CBOE Volatility index, Wall Street’s “fear gauge”, which has swung wildly since the June 23 vote by Britons to leave the European Union, ended at its lowest since late May.

However some investors remained concerned about the effects of “Brexit” and the upcoming earnings season.

Near record lows in 10- and 30-year US government bond yields underscored those concerns.

Advancing issues outnumbered declining ones on the NYSE by a 8.01-to-1 ratio; on Nasdaq, a 4.90-to-1 ratio favored advancers.

The S&P 500 posted 61 new 52-week highs and one new low; the Nasdaq Composite recorded 126 new highs and 14 new lows.

About 7.1 billion shares changed hands in US exchanges, compared with the 7.79 billion daily average over the past 20 sessions.