S&P 500 crosses 1,700 points for the first time
NEW YORK – Stocks rose Thursday morning after an encouraging employment report, sending the Standard & Poor's 500 index above 1,700 points for the first time.
The S&P 500, which investors follow closely as a gauge for the rest of the market, was up 18 points in early trading, or 1.1 percent, at 1,704.
The Dow Jones industrial average rose 144 points, or 0.9 percent, to 15,644. The Dow is also at a record high. The Nasdaq composite index rose 37 points, or 1 percent, to 3,664.
All 10 industry sectors in the S&P 500 index rose, led by banks and industrial stocks.
The driving force for the advance was a report from the Labor Department that the number of Americans seeking unemployment benefits dropped last week to the lowest since 2008. Higher auto sales and earnings gains at several U.S. companies including CBS also drove the market higher.
Investors know that employment figures that track just a week are volatile, but it was still a surprisingly strong number. Economists are likely rethinking their estimates on July job growth, numbers that the government will release Friday.
The S&P 500 has never closed above 1,700, nor has it crossed that mark in intraday trading. Previously, its highest close was 1,695.52 on July 22.
The S&P 500 has made the jump from 1,600 to 1,700 in less than three months. The index first traded above 1,600 May 3. The move previous 100-point gain took much longer to achieve. The index first closed above 1,500 more than a decade ago, toward the end of the dot-com bubble in March 2000.
The index then lost almost half of its value over the next two years before rebounding in the four-year bull run that preceded the financial crisis. That rally ended in October 2007 when the S&P 500 was just short of the 1,600 level. Stocks then slumped and the S&P 500 fell as low 676.53 in March 2009 before commencing its current bull run.
The market's sharp advance on Thursday was a contrast from the lethargy of the past few days. On Tuesday and Wednesday, the S&P 500 moved less than a point each day. On Tuesday, it was because investors didn't want to make a move before the Federal Reserve's policy announcement scheduled for the next day.
On Wednesday, it was because the Fed didn't make much of a move: It said, unsurprisingly, that the U.S. economy was recovering but still needed help, and didn't give any indication of when it might cut back on its bond-buying program, which has been supporting financial markets and keeping borrowing costs ultra-low.
Two other major central banks, the Bank of England and the European Central Bank, also left their policies unchanged in announcements this week.
Automakers are posting sales for July, and Chrysler started the industry off with a bang. The Detroit automaker said sales rose 11 percent last month, its best July in seven years.
The price of crude oil rose $2.69, or 2.6 percent, to $107.71 a barrel. Gold slipped 20 cents to $1,312 an ounce. The dollar rose against the euro and the Japanese yen.
In U.S. government bond trading, the yield on the 10-year Treasury note rose to 2.66 percent from 2.58 percent late Wednesday.
Among stocks making big moves:
—Dell rose 24 cents, or 2 percent, to $12.90. Its shareholders are scheduled to vote Friday on an offer by CEO and founder Michael Dell to buy the company.
— CBS rose $2.10, or 4 percent, to $54.91 after reporting an 11 percent jump in income, beating analysts' estimates. CBS benefited from licensing its shows to online streaming providers such as Netflix and from increasing the income it receives from cable and satellite TV distributors to retransmit its programming.
—Exxon Mobil fell $1.65, or 2 percent, to $92.08, after reporting lower earnings as oil and gas production slipped. Profit margins on refining oil also fell.
—J.C. Penney rose 42 cents, or 3 percent, to $15.03. The stock plunged Wednesday after a report that CIT, the largest lender in the clothing industry, had stopped supporting deliveries from the chain's suppliers. J.C. Penney said Thursday that the report wasn't true.
J.C. Penney was also scheduled to give closing remarks in a New York court case Thursday. Penney had been sued by rival Macy's, which said J.C. Penney did not have the right to distribute Martha Stewart products because Macy's own deal was exclusive. Macy's rose 46 cents, or 1 percent, to $48.80.