S&P 500 hits record close, Nasdaq tops 5000
Stocks rallied after three straight days of losses for the S&P 500 and Dow -- which on Thursday logged a new closing high and jumped nearly 200 points, respectively.
The rally was broad-based as all 10 sectors of the Standard & Poor's 500 were higher with technology leading the way. The S&P 500 index gained 23 points, or 1.1%, to 2121.10. That tops its previous record finish of 2117.69, set on April 24.
The Dow Jones industrial average climbed 192 points, or 1.1%, to 18,252.24 as it approached its record closing high of 18,288.63, set March 2. All but one of the 30 stocks in the Dow ended higher.
The Nasdaq composite index rose 1.4% and shot above the 5000 mark to close at 5050.79.
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Stocks have struggled recently on concerns about rising interest rates, bond market volatility and economic weakness. The recent sell-off in the bond market eased slightly Thursday as bond prices rose, sending the yield on the 10-year Treasury note down to 2.25% from 2.28% Wednesday.
But investors today seemed to be in a buying mood, as many of the market's recent headwinds seemed to dissipate a bit.
For one, the recent sharp spike in long-term U.S. government bonds, seems to have lost momentum. After hitting a 6-month high earlier this week, the 10-year Treasury has found buyers again, keeping a lid on higher rates, at least for the moment.
The U.S. dollar, which had been trending sharply higher heading into April, continued to weaken vs. the euro. The euro climbed to 1.14 vs. the dollar, a three-month high.
As a result, the negative drag on corporate earnings and sales for big U.S. companies that do a lot of business abroad has dissipated. In the process, the weakening dollar has given new life to shares of U.S. multinationals, as their products are now cheaper to purchase around the world, which is a boost to sales and earnings.
A lower than-expected reading on inflation at the producer level also buoyed investors, as it signaled that inflation is not ready to spike dramatically, which means the Federal Reserve could hold off even longer on its first interest rate hike. Low interest rates, of course, have been a boon to the stock market since the market low back in March 2009.
In economic news:
• Producer prices fell 0.4% in April on a sharp drop in food and gasoline costs, the Labor Department reported. Core prices at the wholesale level, excluding the volatile food and energy categories, fell 0.2%.
• Weekly jobless claims remained near 15-year lows as applications for unemployment benefits fell 1,000 to a seasonally adjusted 264,000 last week.
Overseas, European markets were higher as Germany's DAX jumped 1.8% and France's CAC 40 gained 1.4%. Britain's FTSE 100 rose 0.3%.
In Asia, Japan's Nikkei 225 index fell 1% and Hong Kong's Hang Seng index gained 0.1%. The Shanghai Composite rose 0.1%.
An early rally faltered Wednesday and stocks ended mixed as the Dow and S&P 500 notched a third straight day of losses. The government reported retail sales were essentially flat in April, falling short of Wall Street forecasts and setting off concerns about the momentum of growth in the U.S. economy.
Contributing: Jane Onyanga-Omara