Wall Street advances, Dow reaches new high
EmptyNEW YORK -- Wall Street advanced sharply Wednesday, sending the Standard & Poor's 500 index to its first record close in more than seven years, after minutes from the Federal Reserve's last meeting offered investors no major surprises about the economy. The Dow Jones industrials also reached a new high close.
The S&P 500, considered by traders as the best barometer of U.S. stocks, surpassed the record of 1,527.46, set March 24, 2000, at the peak of the dot-com boom, closing at 1,530.23, up 12.12, or 0.80%, according to preliminary calculations.
The index of 500 of the nation's biggest companies was powered by investors' relief over the minutes from the Fed's May 9 meeting of its Open Market Committee. The central bankers called inflation "uncomfortably high," a stance that made it less likely that the Fed would act to cut interest rates. But Wall Street, which had been hoping for signs of a rate reduction, coped well with that reality -- and were pleased that a rate hike didn't seem to be in the offing.
The S&P 500, which crossed its closing record on May 21 and then retreated, remains below its all-time trading high of 1,552.87, also reached in March 2000.
The Dow, the first of the major market indexes to recover from Wall Street's prolonged slump in the early part of the decade, closed at 13,633.08, up 111.74, or 0.83%, and also reached a new trading high of 13,636.09.
The recovery of the S&P 500 comes as the index now has fewer technology stocks than in 2000. Financial-services companies, which now make up the largest slice of the index, have helped drive the market's run since the second half of last year.
By comparison, the Nasdaq isn't expected to reach its closing high of 5,048.62, set March 24, 2000, anytime soon. The tech-dominated index -- which closed up 20.53, or 0.80%, at 2,592.59 -- was arguably overinflated by the rush to join the Internet boom.
The record close for the S&P and Dow came after the markets had opened sharply lower following a pullback in the often volatile Chinese stock markets. But, investors remained resilient and pushed stocks higher after determining China's woes were likely contained and found little reason for pessimism from the Fed's comments.