The benchmark index is now at its highest level since May 2008 and 10 per cent below the record close of 1,565.15 set in October 2007.
“This is the type of thing that typically gets retail investors back in the market,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois.
Analysts have said a flow of retail investor money could fuel the next leg of the rally that has driven the S&P 500 up 12 per cent so far this year.
Apple, the world’s most valuable publicly traded company, rose 2.7 per cent to $601.10 – marking the first time the stock has ended above $600 - and inching closer to a 50 per cent gain this quarter.
The announcement from Apple that it will pay a dividend of $2.65 a share quarterly from July comes less than a week after major US banks responded to the results of the Federal Reserve’s stress tests by announcing bigger dividends and billions of dollars in stock buybacks.
These increases, alongside a steady stream of upbeat US economic data, have cleared the way for more investment in stocks.
“You’re getting initiations and increases in dividends, and people are starting to recognize there is nowhere else to go,” said Jack de Gan, chief investment officer at Harbor Advisory in New Hampshire.
An S&P index of small-cap stocks closed at an all-time high, while an index of midcap shares, near their record high, confirmed the broad-based nature of the US equities rally.
Financials were the second-best performing among the top 10 S&P 500 sectors, ranking only behind the tech sector. The S&P financial index gained 0.6 per cent.
The Dow Jones industrial average edged up 6.51 points, or 0.05 per cent, to 13,239.13 at the close. The S&P 500 Index gained 5.58 points, or 0.40 per cent, to 1,409.75. The Nasdaq Composite rose 23.06 points, or 0.75 per cent, to 3,078.32.
UBS raised its price target for US Steel’s stock by almost 24 per cent, attracting a blitz of investor attention, and the hard metal maker's shares jumped 6.4 per cent to $31.64.
United Parcel Service rose 2.8 per cent to $81.11 as it clinched a deal to buy Dutch peer TNT Express, making UPS the market leader in Europe.