THE S&P 500 closed at a 29-month high yesterday led by gains in tech and commodity shares, as investors largely ignored the US Federal Reserve’s lukewarm economic assessment.
The stock market had little reaction to the Fed, which said high unemployment still justifies a $600bn bond-buying programme that has helped equities rally in the last few months.
Strong earnings continue to support further gains in stocks. The technology sector was led higher by network equipment maker Juniper Networks, whose quarterly sales beat Wall Street’s expectations. Shares rose 6.4 per cent to $37.05.
“We seem to have gone back to focusing on the basics – the economy and the earnings. Earnings are coming in good and the economy is taking baby steps forward,” supporting the stock market, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
“The technology sector especially is the leading sector in the broad market and its performance is impacting the rest of the market.”
Commodity shares got a boost after Allegheny Technologies forecast stronger sales in 2011, helped by higher base prices for metals. The stock surged 11.8 per cent to $65.29.
The S&P materials sector rose 2.1 per cent. The Dow Jones industrial average edged up 8.25 points, or 0.07 per cent, to end at 11,985.44. The Standard & Poor’s 500 Index advanced 5.45 points, or 0.42 per cent, to 1,296.63. The Nasdaq Composite Index gained 20.25 points, or 0.74 per cent, to 2,739.50.
The Dow rose above the psychologically important 12,000 for the first time since June 2008, but ended slightly lower as the 30-stock average was held in check by Boeing.
Boeing shares fell 3.1 per cent to $70.02 after the US plane maker posted a drop in quarterly profit and offered a disappointing forecast.
Thomson Reuters’ latest data showed 69 per cent of the 144 S&P 500 companies that have reported earnings so far have exceeded estimates. The S&P 500 index continues to show overbought readings in various short-term technical indicators after last week’s decline released some selling pressure.