May 13, 2014 in Business

Dow hits record high

Twitter, Facebook post comebacks since plunge
Steve Rothwell Associated Press
For the year:

• The Dow is up 118.81 points, or 0.72 percent.

• The S&P 500 index is up 48.29 points, or 2.61 percent.

• The Nasdaq is down 32.73 points, or 0.78 percent.

NEW YORK – The stock market returned to record levels on Monday as investors regained their appetite for riskier stocks.

After beating down Internet and small companies for two months, investors decided that those stocks had fallen enough. Among the big gainers were Twitter and Facebook, which had plunged in March and April. The Russell 2000, an index made up of small companies, climbed the most in two months.

Investors have been more cautious this year than last. They’ve favored big, less volatile stocks that pay rich dividends because of concerns about the outlook for the economy. Utility and energy companies have been among the beneficiaries of this trend and have outperformed the overall market in 2014.

While interest rates remain low, investors will likely keep getting drawn back into stocks after any sell-off because holding cash isn’t generating any returns, said Tim Courtney, chief investment officer at Exencial, an independent wealth management company.

“There is some bargain buying in some of the names that got hit hard in March and April,” said Courtney

On Monday, the Standard & Poor’s 500 index rose 18.17 points, or 1 percent, to finish at an all-time high of 1,896.65. The index last closed at a record high on April 2, when it reached 1,890.90.

The Dow Jones industrial average gained 112.13 points, or 0.7 percent, to end at 16,695.47 Monday. The Dow’s previous record high was 16,583.34 on Friday.

The Nasdaq climbed 71.99 points, or 1.8 percent, to 4,143.86.

Gains on Monday were led by technology and industrial companies, sectors that are expected to benefit most if the economy starts growing faster.

In government bond trading, prices fell. The yield on the 10-year Treasury note climbed to 2.66 percent from 2.63 percent on Friday.

Bond yields started falling at the start of the year as an unusually harsh winter put the brakes on the U.S. economy. They have continued to fall even as reports show the economy is strengthening again.

“There are a number of mysteries out there in the market,” said Gerry Paul, chief investment officer of U.S. value equities at AllianceBernstein. “To me, one of the biggest is why the 10-year Treasury is trading where it is.”

© Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

There is one comment on this story. Click here to view comment >>

Get stories like this in a free daily email