Dow, S&P at record highs
NEW YORK – Stocks closed sharply higher on Wall Street, led by gains in technology companies.
The Dow Jones industrial average rose 128 points, or 0.9 percent, to 14,802. It was the Dow’s third gain in a row.
The Standard & Poor’s 500 rose 19 points to 1,587, or 1.2 percent. The Dow and S&P both closed at record highs.
The Nasdaq composite posted even bigger gains thanks to the surge in tech stocks. That index was up 59 points.
Networking equipment and semiconductor makers soared after Adtran, a network communication company, reported a surge in profits, suggesting that businesses are spending more on tech upgrades.
Three stocks rose for every one that fell on the New York Stock Exchange. Volume was average at 3.4 billion shares.
Chipmakers Micron and Intel jumped, as did other network equipment makers like Cisco and JDS Uniphase.
The S&P 500 climbed as high as 1,588 in the afternoon, beating the high of 1,576 it set during the day on Oct. 11, 2007.
Technology stocks led the way higher with an increase of 1.8 percent. The group is up just 4.7 percent this year, trailing the S&P’s gain of 11.4 percent.
The stock market is reversing course from last week, when investors’ confidence took a blow from an unexpectedly poor report on the U.S. job market and other signs that the U.S. economy slowed in March.
Chipmaker Intel logged the biggest percentage gain in the 30-member Dow index, rising 62 cents, or 2.8 percent, to $22.36. Cisco Systems rose 55 cents to $21.52 and Microsoft gained 60 cents to $30.21.
Cameron Hinds, regional chief investment officer at Wells Fargo Private Bank based in Nebraska, said rising house prices, coupled with a strong stock market, are creating a virtuous circle for consumers and is bolstering investors’ confidence.
“We are starting to develop what I would call a positive confidence loop,” Hinds said. “Last year we were lacking in confidence.”
The Federal Reserve released the minutes of its March policy meeting ahead of schedule Wednesday morning. The minutes indicated that some Fed members wanted to end the bank’s stimulus program relatively soon, saying the costs likely outweigh the benefits. The Fed’s stimulus program has been one of the key factors driving stocks higher this year.
Investors may welcome signs that the economy is recovering well enough that it may no longer need support from the Fed, said Brian Gendreau, a market strategist at Cetera Financial Group.
“The idea that the Fed thinks that we are closer to the restoration of normality might be positive for the market,” said Gendreau.
Hospital management stocks fell heavily after Deutsche Bank lowered its recommendation on the companies because their prices have risen so much that they no longer offer good value. Private hospitals have surged over the past year in anticipation that health care spending will increase following the introduction of the Patient Protection & Affordable Care Act. Health Management Associates plunged $2.13, or 17 percent, to $10.47. Tenet Healthcare fell $2.35 to $41.17 and Community Health Systems dropped $1.74 to $42.17. European markets also rose broadly. Benchmark indexes were up 3 percent in Italy, 3.4 percent in Spain, 2 percent in France and 2.3 percent in Germany.
Yields fell on the government bonds of Italy and Spain, which means investors are more confident in the finances of those countries.