S&P 500 hits fresh five year closing high

US bank and commodity shares led the Standard & Poor’s 500 to a fresh five-year closing high yesterday on hopes that the global economy continues to mend.

The Dow Jones industrial average also ended at a five-year high.

The market also gained on signals that Republican leaders in the US House of Representatives aim today to pass a nearly four-month extension of the US debt limit. The White House welcomed the move, saying it defuses fears of a US default on its debt.

Investors, however, were cautious ahead of an increase in earnings reports and as the S&P 500 rose for a fifth straight day. Jack de Gan, chief investment officer of Harbor Advisory Corp, said better economic numbers in the US and China, as well as more stabilisation in Europe, were driving buyers into sectors associated with economic growth.

“Any (bearish) news could turn us down for a day or so,” he said, referring to the recent string of gains.

Freeport-McMoRan Copper & Gold led gains in the materials sector after it reported a 16 per cent rise in fourth-quarter profit on higher production. Shares gained 4.6 per cent to $35.19.

The Dow Jones industrial average rose 62.51 points, or 0.46 per cent, to 13,712.21 at the close. The S&P 500 gained 6.58 points, or 0.44 per cent, to 1,492.56. The Nasdaq Composite added 8.47 points or 0.27 per cent, to 3,143.18.

Signs of improved sentiment toward world growth were seen in European bond markets. The yield on Portugal’s benchmark 10-year note fell below six per cent for the first time since late 2010 on news that the country was set to tap the bond market this week for the first time since its 2011 bailout.

Technology shares underperformed as concerns about Apple’s ability to continue to grow at hyper speed and a weak outlook from Intel diminished optimism about the sector’s prospects.

The S&P technology index added 0.16 per cent, compared with 0.9 per cent gains in energy, financials and basic materials. In extended-hours trading, Google shares rose 4.5 per cent to above $734 after the world’s No1 search engine reported a jump in fourth-quarter revenue, while IBM added more than three per cent to trade above $200.