S&P cracks 1,400 for first time since 2008
The United States stock market cleared another barrier Thursday in its long recovery from the Great Recession: The Standard & Poor's 500 index closed above 1,400 for the first time since June 2008.
The Dow Jones industrial average, driven higher like the rest of the market by more good economic news, set a four-year high. It climbed 58.66 points to finish at 13,252.76, its highest close since the last day of 2007.
It was the seventh gain in a row for the Dow, the longest streak since February 2011.
The government said applications for unemployment benefits fell last week to 351,000, matching a four-year low. When applications stay below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.
Optimism about the job market and the broader economic recovery has driven stocks steadily higher all year. The S&P is up more than 11 percent, beating its performance for an average year, and the Dow is up more than eight per cent.
Employers have added an average 245,000 jobs each month since December.
"We've been sputtering for the last couple of days, but now we're seeing those strong jobs numbers really drive the market higher," said Joe Bell, senior equity strategist at Schaeffer's Investment Research.
A separate report Thursday showed that prices paid by wholesalers rose less than expected in February, despite a spike in gasolene prices. The producer price index has increased 3.3 per cent in the past year, the smallest gain since August 2010.
The S&P finished at 1,402.60, up 8.32 points. The close put it about 107 points shy of its record, 1565.15, set in October 2007. And the index, the broadest of the three major market gauges, suggests stocks are still inexpensive by historical standards.
The S&P trades at about 14.5 times the past year's earnings for its 500 companies, compared with a historical average of 15. It's not unusual for stocks to trade higher than the long-term average and for many years at a time.
The index is up 107 per cent since its low during the Great Recession in March 2009.
Nine of the 10 industry groups in the S&P finished higher, led by financial stocks, which gained 1.9 per cent as a group. Utility stocks, traditionally sought by investors with little tolerance for risk, were the only group to fall.
The Nasdaq composite index climbed 15.64 points to close at 3,056.37. It has gained 17 per cent this year, easily beating the Dow and S&P, and is trading at levels last seen in December 2000.
The price of oil dropped almost $2 per barrel in minutes after a report just before noon that the United States and Britain had agreed to release oil from emergency reserves.