Email
Password
Remember meForgot password?
    Log in with Twitter

article imageS&P 500 stock index hits new high

By Ken Hanly     Jul 11, 2016 in Business
New York - The Standard and Poor 500 (S&P 500) hit an intraday record high, as investors appear more optimistic about the growth of the U.S. economy, even amid lingering concerns about global growth.
The S&P 500 is a key index based upon the market capitalization of 500 large companies listed on either the New York Stock Exchange (NYSE) or the NASDAQ. It is a commonly followed index as many consider it one of the best representations of the US stock market and a useful guide to the future of the US economy.
The S&P has been struggling to break through its May 2015 high in the last few months, but got a boost on Friday as there was a positive reaction to the good jobs report. At 11:13 a.m. Eastern Time the S&P reached an intraday high of 2,140.53 compared to the May 2015 high of 2,134. The index was up 10.53, or almost half a percentage point.The gains were broadly based with seven of the ten S&P categories showing gains.
Ernesto Ramos of BMO Global Asset Management said that it was clear that interest rate hikes would be delayed, and as a result investors were turning to equities where they could get a better return than on bonds. While yields did rise on 10 year US Treasury notes, the yield was still close to the record lows reached after the Brexit.
Second quarter corporate earnings will start coming in this week, and if they are not positive, stock market indices may start to fall. The S&P is already trading past its 10-year median 12-month earnings of 14.7 times, at 16.7 times. Earnings are predicted to fall 4.8 percent this last quarter compared with 2016. The S&P recorded 67 new 52-week highs and the NASDAQ witnessed 132 new highs. The Toronto Stock Exchange (TSX) index also was nearing a record high as investors are searching for returns.
Information technology was leading the S&P with utilities lagging. Randy Frederick, of Charles Schwab said: "I've been expecting a record close for a while. It's a good thing because it cements this seven-year-old market, which is the second longest in history." Some analysts think the election of Shinzo Abe in Japan also contributed positively to the gain. Peter Cardillo of First Standard Financial said: "I think what we're seeing is the successful election for [Shinzo] Abe ... is fueling the rally here. Basically, it's a post-labor report rally helped by the elections in Japan." Although the policy of increasing the money supply, spending and reform characteristic of Abenomics shows signs of failing Abe won a landslide victory in the Japanese upper house.
As well as new earnings reports, the market will face data on new job openings and labor turnover, wholesale trade data on Tuesday and then import-export prices due Wednesday. Also on Wednesday, the Beige Book will be released, giving a summary of current economic conditions.
More about S & P, us business, us stock market
More news from
Latest News
Top News