May 22, 2007 in Business

Stocks mixed; S&P briefly passes record

Associated Press The Spokesman-Review
 

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Wall Street reached another milestone during a muted session Monday, when the Standard & Poor’s 500 index briefly passed its record close of 1,527.46 for the first time in more than seven years.

The S&P 500, considered by market professionals the best indicator of stock performance, surpassed the mark shortly after noon following news of a fresh spate of takeover deals. The broad market index has lagged the Dow Jones industrial average in recovering from Wall Street’s prolonged slump earlier this decade.

The S&P 500 rose as high as 1,529.87, then edged back to 1,525.10, up 2.35, or 0.15 percent, as cautious investors locked in some profits after weeks of gains. The index’s advance was driven by buying in non-technology sectors such as energy, materials, industrials and financials, S&P data showed. It is still well below its all-time trading high of 1,552.87 set on March 24, 2000, the same day the index reached its record close.

Reassuring Wall Street Monday that acquisition activity will keep up its record pace this year, General Electric Co. said it is selling its plastics division to Saudi Arabia’s largest industrial company, Saudi Basic Industries Corp., for $11.6 billion.

The Dow retreated modestly after venturing further into record territory earlier in the day. The blue chip index fell 13.65, or 0.10 percent, to 13,542.88 after hitting an intraday high of 13,586.03.

The Nasdaq composite index rose 20.34, or 0.80 percent, to 2,578.79, after reaching a six-year high of 2,587.87. The index rose as Amazon.com’s stock saw big gains, and as investors bought up small-cap stocks, which have been trailing large-cap stocks this year.

The Russell 2000 index of smaller companies rose 9.99, or 1.21 percent, to 833.65, a new record close.

In early 2000, all the major stock market indicators reached record highs, only to be dragged down by the end of the dot-com boom, recession, the 2001 terror attacks and a series of corporate scandals including the collapse of Enron Corp. The S&P 500 fell to a low of 776.76 in October 2002 at the depths of a three-year bear market on Wall Street.

The market recovered slowly, but it wasn’t until last October that the more widely recognized Dow Jones industrial average surpassed its own previous closing high of 11,722.98. The Dow has gone on to barrel past 13,000 as Wall Street rallies on a mixture of corporate takeover news, respectable earnings and hopes for an interest rate cut.

After 24 record closes for the Dow this year, the S&P has finally caught up.

Bonds rose Monday. The yield on the benchmark 10-year Treasury note slipped to 4.79 percent from 4.81 percent late Friday. The dollar gained against other major currencies, and gold prices also rose.

Crude oil soared $1.33 to $66.27 a barrel on the New York Mercantile Exchange.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange. Consolidated volume came to 3.48 billion shares, up from 2.92 billion Friday.

The S&P’s milestone comes during a light week for economic data. The few notable reports are Thursday’s durable goods and new homes sales reports from the Commerce Department, and Friday’s existing home sales data from the National Association of Realtors.

Overseas, Japan’s Nikkei stock average rose 0.90 percent. Britain’s FTSE 100 slipped 0.06 percent, Germany’s DAX index added 0.15 percent, and France’s CAC-40 fell 0.18 percent.


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