Wall Street jumps as banks lead indexes to new highs

NEW YORK Wed May 15, 2013 4:51am IST

1 of 3. Traders work on the floor at the New York Stock Exchange, May 13, 2013.

Credit: Reuters/Brendan McDermid

Stocks

   

NEW YORK (Reuters) - Stocks rallied to fresh highs on Tuesday as investors picked up large-cap companies' shares on the expectation that central bank stimulus will help propel the rally further.

Gains were broad, but growth sectors outperformed their peers with bank stocks leading the way. Bank of America (BAC.N), up 2.8 percent at $13.34, was the Dow's biggest percentage gainer, while Citigroup Inc (C.N) rose 2.4 percent to $50.09.

Wall Street has rallied without a significant correction since the start of the year, pushing major indexes to all-time records and sending the S&P 500 up almost 16 percent for 2013 so far.

The ascent has been driven in large part by the Federal Reserve's easy monetary policy, designed to stimulate the economy, though investors' focus has turned to when the Fed may start to rein in its bond-purchase program.

"The developed economies of the world are all easing aggressively, the money is looking for a home, and it's ending up in the stock markets," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

For now, investors are betting that the central bank will be careful not to remove its support too soon in order to not disrupt the economic recovery it is trying to foster, Hellwig said.

So far, declines in the market have been met with buying and investors are trying to gauge how long that can last.

"People are indeed trying to participate in the rally, but at the same time, they're trying to be cautious," said Brad McMillan, chief investment officer of Commonwealth Financial, based in Waltham, Massachusetts.

The S&P 500 financial sector index .SPSY rose 1.7 percent, while the S&P transports group index .SPLRCTRN gained 1.4 pct.

The Dow Jones industrial average .DJI gained 123.57 points, or 0.82 percent, to close at a record 15,215.25. The Standard & Poor's 500 Index .SPX rose 16.57 points, or 1.01 percent, to end at a record 1,650.34. The Nasdaq Composite Index .IXIC climbed 23.82 points, or 0.69 percent, to 3,462.61, its highest close since November 2000.

During the session, the Dow hit an all-time intraday high of 15,219.55, while the S&P 500 climbed to an all-time intraday high of 1,651.10.

The Nasdaq touched a fresh 52-week high of 3,468.67.

The market had traded sideways for the past three sessions, showing a gain of just 0.07 percent as the winding down of the quarterly earnings season and a light economic calendar have left investors without a strong catalyst for further gains.

The Dow's gains were limited by weakness in Intel Corp (INTC.O), down 1 percent at $23.84, and UnitedHealth Group (UNH.N), off 1.1 percent at $61.73.

U.S.-listed shares of Sony Corp (6758.T)(SNE.N) jumped 9.9 percent to $20.76 after billionaire hedge fund investor Daniel Loeb called on the company to spin off its lucrative entertainment arm.

Nokia Corp (NOK.N) unveiled a new version of its Lumia smartphone line, but U.S.-listed shares fell 5.2 percent to $3.64. Research company Gartner said Nokia lost 5 percentage points of market share in the first quarter, falling to 14.8 percent.

Solar power companies' shares fell after Trina Solar Ltd (TSL.N) estimated lower panel shipments than a previous outlook and said its results would be hurt by a foreign currency exchange loss. The stock fell 8.8 percent to $5.41, while Yingli Green Energy (YGE.N) slid 6.3 percent to $2.36.

Most corporate earnings have been better than expected this quarter. With 90 percent of the S&P 500 companies having reported results so far, 67.2 percent have topped earnings expectations, according to Thomson Reuters data, which is even with the average over the past four quarters. However, only 46.9 percent have beaten revenue expectations, below the 52 percent average over the past four quarters.

Volume was roughly 6.2 billion shares on the New York Stock Exchange, the Nasdaq and the NYSE MKT, just below the average daily closing volume of about 6.4 billion this year.

Advancers outnumbered decliners on the NYSE by a ratio of about 2 to 1, while on the Nasdaq, more than two stocks rose for every one that fell.

(Editing by Jan Paschal)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Earnings Season

REUTERS SHOWCASE

Record Highs

Record Highs

BSE Sensex, Nifty hit record highs, insurers gain  Full Article 

Global Growth

Global Growth

IMF cuts outlook, warns of stagnation risk in rich nations  Full Article 

Monsoon Revives

Monsoon Revives

Monsoon revival keeps rain above average   Full Article 

Tackling Food Prices

Tackling Food Prices

India to free up extra 10 million tonne wheat in open market  Full Article 

Just Not Enough

Just Not Enough

Amazon's smartphone fails to kindle a "Fire" among reviewers.  Full Article 

Struggling Economies

Struggling Economies

Asian economies to struggle on weak export demand - Reuters poll  Full Article 

Rising Market Value

Rising Market Value

Facebook goes express to mega-cap status  Full Article 

Mining Roadblock

Mining Roadblock

Coal India's plans for 20 mines hit by land, environment delays  Full Article 

Power Jolt

Power Jolt

UAE's TAQA pulls out of India power plant deal with Jaiprakash  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage