S&P 500, Nasdaq close at record highs
NEW YORK (AP) — The S&P 500 hit an all-time high Tuesday, marking the stock market’s complete recovery from a nosedive at the end of last year.
The benchmark index’s previous record was set last September, shortly before the market sank in the fourth quarter amid fears of a recession, an escalating trade war between the U.S. and China, and concern the Federal Reserve was moving too aggressively to raise interest rates.
Those concerns have eased or taken a back seat to more optimism among investors this year. Investors are more confident in the prospects for steady, if slower, growth. And they’ve been encouraged by an increasingly hands-off Federal Reserve, which has signaled this year that it may not raise interest rates at all in 2019 after seven increases the prior two years.
Traders are also feeling more optimistic about the global economy. In China, economic growth held steady at 6.4% in the first quarter of the year as increased government efforts to stem a slowdown gained traction. In the U.S., job growth rebounded in March following a surprisingly weak February.
And the uncertainty over the costly trade dispute between the U.S. and China has eased in recent weeks amid signs that both sides are making progress toward reaching a resolution.
The S&P 500 has now recovered all of the ground it lost last fall, gaining 24.8% since it hit a bottom on Christmas Eve.
“New highs, in and of themselves, tend to be bullish and tend to beget more new highs,” said Willie Delwiche, investment strategist at Baird. “You have the combination of Fed friendliness, the economy still in good shape and some expectations from an earnings front being reset that create a fundamental backdrop that isn’t all together unfavorable for stocks.”
Tuesday’s broad rally was driven by big U.S. companies turning in solid results for the first quarter. That surprised investors because analysts have forecast the worst quarter of earnings growth in years.
The S&P 500 index gained 25.71 points, or 0.9%, to 2,933.68. It’s previous record high was 2,930.75, which was set on Sept. 20.
The Dow Jones Industrial Average rose 145.34 points, or 0.5%, to 26,656.39. The Nasdaq composite index climbed 105.56 points, or 1.3%, to 8,120.82, beating the record high close of 8,109.69 it reached on Aug. 29.