MARKET SNAPSHOT: U.S. Stocks Extend Rebound, Pushing S&P 500 To Record
By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The S&P 500 closed at a record high Wednesday, narrowly beating its previous peak reached
on Dec. 31, as investors took upbeat manufacturing data, Bank of America Corp. earnings, and Apple Inc.'sChina deal as
signs economic growth was on solid ground.
The S&P 500 index (SPX) closed 9.5 points, or 0.5%, higher at 1,848.38 and set a new intrday peak of 1,850.84. The
benchmark beat its previous record close reached on Dec 31 by only 0.02 point and is now flat for the year.
The Dow Jones Industrial Average(DJI) added 108.08 points, or 0.7%, climbing to 16,481.94. The Nasdaq
Composite(RIXF), the best-performing index, rose 31.87 points, or 0.8%, to 4,214.88. The tech-heavy index turned
positive for the year after sharp gains on Tuesday.
Follow the stock market live blog.
John Fox, director of research at Fenimore Asset Management, says that markets have already priced in the possibility
of the Fed completing its taper by the end of the year, and that if it happens early, it will have a minimal impact.
"The economy is improving, which means better corporate earnings. We have created more than 2 million jobs and at 10-
year yield below 3%, markets can only go up. At current multiples, markets will go up even if the 10-year yields rise to
3.5%, because at a price-to-earnings ratio of 17.6, there is room for a bit more expansion," Fox said.
Upbeat earnings results from Bank of America ( BAC ) underpinned gains for the financial sector of the S&P 500, the
second best performing of the 10 after telecoms. The bank's fourth-quarter earnings topped analysts' expectations and
shares rose 2.3%. Read a recap of the live blog of Bank of America's earnings call.
Apple Inc. ( AAPL ) shares rose 2% after the chairman of China Mobile said the company's recent deal with Apple will
entail broad cooperation between the two. He also said millions of iPhones have already been ordered by customers,
signaling strong demand for the device. Apple's Chief Executive Officer Tim Cook said he was "incredibly optimistic"
about the outcome of cooperating with the Chinese carrier.
Stocks added to gains after the Federal Reserve released a report, known as the Beige Book, saying the U.S. economy is
continuing to grow at a moderate pace and the economic outlook is positive, confirming recent economic indicators.
Earlier, the Federal Reserve Bank of New York's report showed manufacturing activity in the New York region surged in
January, far more than anticipated, after three months of weak readings.
Separately, U.S. wholesale prices rose in December for the first time in three months, largely reflecting higher costs
for gasoline and tobacco, the U.S. Department of Labor said. The gains were higher than economists expected.
Jeffrey Kleintop, chief market strategist at LPL Financial, wrote in a research note that the "second-year curse" may
offer a better indication as to how the year may unfold.
"Year two of the presidential cycle has typically been a volatile one for investors. Will the year-two curse repeat in
2014? It may, particularly if a temporary economic soft spot develops in the second quarter. Weak economic data readings
led to 5% or more pullbacks beginning in the spring of each of the past four years," Kleintop wrote.
Shares of General Motors Co. (GM.XX) fell 1.6% after the auto maker said it sees "modest" 2014 North American market-
share gains, but it also forecast restructuring costs of $1.1 billion for this year. GM said after the market closed
Tuesday that it would pay a dividend this March, the first since May 2008.
Aeropostale Inc. ( ARO ) shares rose 0.7%. The teen retailer has reportedly reached out to at least two private-equity
firms to gauge interest in a sale, but isn't currently in negotiations, according to Bloomberg News.
Shares of Tesla Motors Inc. (TSLA) rose 1.8%. The electric-car company's shares surged 16% Tuesday after the company
said its fourth-quarter sales and deliveries came to "almost" 6,900, beating its own expectations by 20%. The company
also disclosed it would recall up to 29,222 2013 Model S cars because of adapter issues.
PetSmart Inc. (PETM) shares fell 2.4%. Joseph O'Leary, the company's chief operating officer and president, is set to
retire this year and the company said Tuesday it won't fill the chief operating officer position. Instead, the chief
executive will take on the additional title of president as the company reorganizes its leadership structure.
European stocks closed at a six-year high on global growth hopes. The dollar strengthened across the board Wednesday
after U.S. data underscored a recovery in the manufacturing sector.
More stories from MarketWatch:
Jeffrey Gundlach: Treasurys are under-owned, bitcoin is a 'mirage'
If the market goes bust, don't blame boomers
Stock analyst herd mentality highest in nearly 30 years: B. of A.'s Subramanian
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2014 Dow Jones & Company, Inc.