THE S&P 500 rose yesterday to twice its value from just two years ago, in a bounce that showed vigour not seen since the Great Depression.
Stocks were boosted by Dell’s earnings and deal announcements that fuelled hopes for gains, but light volume made the move more tenuous.
The market overcame concerns about tensions between Israel and Iran, and indices slowly climbed back to close near the session’s high.
“It seems there’s just a lot of pent-up demand, and the market is very quick to shrug off news that could appear negative,” said Angel Mata, managing director of listed equity trading at Stifel Nicolaus in Baltimore.
Still, volume struggled to match the year’s average of 7.9 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq. About 7.5 billion shares changed hands yesterday.
The S&P 500 closed up 0.63 per cent or 8.31 points at 1,336.32, double the intraday low hit in early March 2009.
On a closing level, the market has risen more than 96 per cent since March 9, 2009 – a run not seen in such a short period of time since 1936, according to Howard Silverblatt, senior index analyst at Standard & Poor’s.
The steep advance on relative low volume has sparked many forecasts for a correction. “You have still a healthy degree of scepticism out there,” Mata said. “You never want the market to be too bullish.”
Dell, the world’s No. 2 personal computer maker after Hewlett-Packard, flew past Wall Street’s profit and margins estimates late on Tuesday, and its shares jumped 11.9 per cent to $15.56 (£9.67). HP shares gained 2.1 per cent to $48.99.
Two Iranian warships planned to sail through the Suez canal en route to Syria yesterday, an Israeli official said, calling it a “provocation” by the Islamic Republic. The pullback following the comments was another opportunity for money on the sidelines to get back into stocks, Mata said.
The Dow Jones industrial average gained 61.53 points, or 0.5 per cent, to 12,288.17. The Nasdaq Composite Index added 21.21 points, or 0.76 per cent, to close at 2,825.56.
Rising stocks outnumbered declines on the NYSE by a ratio of three to one. On the Nasdaq, more than nine stocks rose for every five that fell.
Crude and basic materials shares gave the market direction, with the S&P 500’s energy sector up 1.3 per cent and materials up 1.2 per cent. Oil services provider Halliburton closed at its highest level since July 2008 after a 4.3 per cent climb to $47.49.