The Standard & Poor's 500 index and Nasdaq composite index both reached four-year highs yesterday as investors, unfazed by oil prices...
NEW YORK — The Standard & Poor’s 500 index and Nasdaq composite index both reached four-year highs yesterday as investors, unfazed by oil prices nearing $60 per barrel, welcomed a raft of strong earnings reports.
The S&P 500 climbed 6.93 to 1,243.72, its best close since June 12, 2001. The Nasdaq gained 12.22 to 2,198.44 for its best showing since June 8, 2001.
The Dow Jones industrial average rose 68.46 to 10,705.55, its highest level since March 15.
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Microsoft, one of the 30 Dow stocks, added 3 cents to close at $25.75 a share. Boeing, also a Dow stock, fell 70 cents to $66.
The earnings, led by DaimlerChrysler and Bristol-Myers Squibb, further fueled investors’ confidence in the stability of the economy. They also helped Wall Street look past a slight rise in first-time jobless claims reported by the Labor Department and the fact that a barrel of light crude settled at $59.94, up 83 cents, on the New York Mercantile Exchange.
The question on many investors’ minds, however, was how high the markets can go, and whether the economy over the second half of the year will support those higher share prices.
“Obviously, we had a nice day yesterday, so now I tend to think that we’re digesting all these earnings and figuring out whether we can move higher,” said Jay Suskind, head trader at Ryan Beck. “The news has been very good, but now the market’s pricing in the second half of the year even more.”
Bonds gained ground after the previous session’s selloff, with the yield on the 10-year Treasury note falling to 4.20 percent from 4.26 percent late Wednesday. The dollar was mixed against other major currencies.
The market’s reaction to second-quarter earnings was notable given the response to first-quarter results in April, when the stock markets dropped considerably.
“This time around, we’re seeing a strong reaction to very positive reports,” said Todd Salamone, director of trading and vice president of research at Schaeffer’s Investment Research in Cincinnati. “A lot of economic questions are still out there, but it looks like with these earnings, people are thinking that we’ll be OK through the third quarter, at least.”