S&P 500 and Nasdaq rose modestly yesterday as the banking sector got a lift from positive analyst comments, while minutes from the Federal Reserve’s last meeting eased concern over rising rates.
The minutes suggested the central bank could keep interest rates at ultra-low levels longer than investors have anticipated if the economy worsens. Lower rates support financial shares, which have been at the center of the market’s year-long rally.
Bank of America rose two per cent to $18.49 and JP Morgan Chase added 1.1 per cent to $45.84 amid the sector’s strong gains.
The three major US stock indexes moved in a tight range, but perked up after the release of the Fed minutes.
The Dow continued to eye the psychologically important 11,000 level, coming within 13 points of the mark in afternoon trading in a brief run into positive territory after the Fed's minutes. The Dow last crossed that mark in September 2008.
By the close, the Dow’s slim gain had evaporated, and it ended just below break-even as Travelers Companies fell. The stock was down 1.4 per cent at $52.59.
The Dow Jones industrial average eased 3.56 points, or 0.03 per cent, to finish at 10,969.99.
But the Standard & Poor’s 500 Index added 2.00 points, or 0.17 per cent, to 1,189.44. The Nasdaq Composite Index rose 7.28 points, or 0.30 per cent, to 2,436.81.
Earlier, the S&P 500 hit an 18-month intraday high at 1,191.80, and the Nasdaq touched a 19-month intraday high at 2,443.50.
Meanwhile, Wall Street’s fear gauge, the CBOE Volatility Index fell 4.6 per cent to end at 16.23, its lowest close since October 2007.
The Nasdaq garnered support from Amazon.com, up 3.1 per cent at $135.56. The launch of Apple iPad has stirred optimism the device could expand the market for e-publishing.
About 7.44bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's estimated daily average of 9.65bn.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 17 to 13, while on the Nasdaq, five stocks rose for every four that fell.