Bulls stay in charge as S&P tops 1,000, Nasdaq tops 2,000
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Wall Street’s bulls climbed past two key altitude markers today without much of a struggle, as fresh data made a strong case that the economy is turning for the better.
The Standard & Poor’s 500 index rose 15.15 points, or 1.5%, to end at 1,002.63, the first close above the 1,000 mark since Nov. 4.
The Nasdaq composite gained 30.11 points, or 1.5%, to 2,008.61, the first finish above 2,000 since Oct. 1.
Major indexes sometimes have trouble getting through big, round numbers on the way up, but today’s powerful advance overwhelmed any selling pressure: Rising stocks outnumbered losers by nearly 5 to 1 on the New York Stock Exchange.
The Dow Jones industrial average rose 114.95 points, or 1.2%,to 9,286.56, its highest close since Nov. 4.
Buyers who have jumped into stocks over the last three weeks have been betting that the global economy will begin to grow again in the second half of the year, and they got more evidence today that they guessed correctly: Indexes measuring July manufacturing activity in the U.S., Britain and China all flashed upbeat signals.
So, too, did a report on U.S. construction spending in June.
The biggest winner today among major stock groups in the S&P 500: basic materials, which includes commodity producers. The average materials stock shot up 3.5% as prices of copper, nickel, oil and other commodities surged. U.S. Steel jumped $3.28, or 8.2%, to $43.03; Du Pont gained 97 cents, or 3.1%, to $31.90.
Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said companies can justify boosting the pace of production after the severe plunge in business inventories in the first half of the year. Increased production naturally should benefit the basic-materials producers, he noted.
Despite the stock market’s hot run since July 10 -- the S&P 500 is up 14% since then, and up 48% from the 12-year low reached March 9 -- Ablin said he doesn’t see signs that the momentum is flagging.
What’s more, he says, ‘There are a lot of doubters on the sidelines with cash. People are waiting for any opportunity to get into the market.’
That’s often the bullish argument, but to Ablin’s point, broad market indexes never suffered the steep pullbacks that many analysts figured was inevitable after the dramatic rebound of March, April and May. The S&P 500 fell just 7% from June 12 to July 10 before rocketing again.
Todd Clark, head of trading at Nollenberger Capital Partners in San Francisco, says market technicians view the 1,007 mark as an important threshold for the S&P 500.
If the index stalls out at that level but sellers fail to swarm and drive prices significantly lower, Clark figures, that will send a message to cautious investors who are on the sidelines: The market doesn’t want to give you the pullback you’re waiting for.
-- Tom Petruno