S&P 500 closes at a record high, beating '07 mark - WSLS 10 NBC in Roanoke/Lynchburg Va

S&P 500 closes at a record high, beating '07 mark

Posted: Updated:
Associated Press Associated Press
NEW YORK -

For the second time in less than a month, the American stock market marched past another milepost on its long, turbulent journey back from the Great Recession, toppling another record left over from the days before government bailouts and failing investment banks.

The Standard & Poor's 500 closed at a new high Thursday, three weeks after another popular market gauge, the Dow Jones industrial average, obliterated its own closing record.

The reaction on Wall Street was muted — more of a dull buzz than a victory cry. Investors warned clients not to get overly excited.

"Getting back to where we were is an important step," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. But he cautioned in a note to investors: "Markets are volatile, and if you are a long-term investor you should expect declines."

The S&P rose six points to 1,569, a gain of 0.4 percent, beating by four points its previous record of 1,565.15 set on Oct. 9, 2007. The index is still shy of its all-time trading high of 1,576.

The index has now recovered all of its losses from the recession and the financial crisis that followed. Investors who put their dividends back into the market have done even better. A $10,000 investment in the S&P back in October 2007 would be worth $11,270.

On any other day, a gain of that size would go unheralded, but not after the turmoil that began in late 2008 and persisted through a slow, sometimes stalled recovery. The milestone generated chatter at water coolers and on business news channels.

The S&P 500 is a barometer that gauges market performance. And while professional investors might scoff at using it to decide when to buy and sell, the breaking of an old record can be psychologically important.

When the S&P 500 last closed this high, it was a headier time. In the fall of 2007, the financial crisis was simmering but hadn't yet boiled over. It was an era before big bailouts and the Great Recession, back when jobs were much easier to come by and salaries seemed to go only up. Bear Stearns still existed. So did Lehman Brothers and Washington Mutual.

Investors have reason to be cautious.

The U.S. economy is stable, but growth is anemic. The European debt crisis is far from resolved. Some investors are concerned that the market's gains this year are being fueled by the Federal Reserve's easy money policy, and will disappear once the Fed reverses course.

The crisis-of-the-moment is Cyprus, the Mediterranean island country that struggled this week to get an emergency bailout from other countries. For many investors, the bailout deal was a reminder of Europe's lingering economic problems.

On Thursday, U.S. economic news was mixed.

The U.S. economy grew faster than first estimated in the fourth quarter, the government reported. But the growth, an annual rate of 0.4 percent, was still weak. The number of Americans seeking unemployment aid jumped for the second straight week. Longer-term, though, jobless claims have been declining since November. Unemployment is 7.7 percent, versus the 4.7 percent in 2007.

"If you're a bull or a bear, you could find enough news out there to convince you of your position," said Jim Lauder, CEO of Global Index Advisors in Marietta, Ga., and co-portfolio manager on Wells Fargo Advantage Dow Jones Target Date Funds.

Cyprus reopened its banks after closing them for nearly two weeks to keep depositors from making panicked withdrawals. Portugal reported that its budget deficit was widening.

Brian Singer, partner at William Blair in Chicago, said the market's gains Thursday were more about a lack of any major negative developments than the appearance of any good ones. Investors aren't necessarily convinced of the economy's health, but they've learned to live with the sicknesses.

"We are looking at a realization that Western civilization is not ending as we know it," Singer said. "Fiscal discussions in the U.S. have settled into an acceptable stalemate. The Italian elections that did not result in a government are on hold. Cyprus hasn't sunk into the Mediterranean."

Thursday also marked the end of the first quarter, since markets are closed for Good Friday. Overall, it's been a strong quarter.

The Dow climbed for the first 10 trading days of March — a record not matched in more than 16 years. In the past 10 days, though, it has wavered under the weight of Cyprus.

The Dow rose 11 percent in the first three months of the year, its best quarterly performance since the fourth quarter of 2011. Last year, it lost ground in two quarters and was up by smaller amounts — 4 percent and 8 percent — in the other two. On March 5, it beat its own all-time record of 14,164.53, which was also set on Oct. 9, 2007, and has been climbing ever since.

To be sure, the S&P 500's last record was followed by a painful downfall. By March 2009, long after the subprime mortgage market had been revealed as an unsustainable bubble and rumors were buzzing that the government might nationalize U.S. banks, the S&P had cratered from its lofty heights. It fell to its Great Recession low, 676.53, on March 9, 2009 — down 57 percent from its October 2007 pinnacle.

Now, with Thursday's gains, it has more than doubled since reaching that bottom. Including dividends, it is up more than 150 percent.

  • U.S.More>>

  • Jury awards Ventura $1.8M in defamation case

    Jury awards Ventura $1.8M in defamation case

    Tuesday, July 29 2014 6:20 PM EDT2014-07-29 22:20:16 GMT
    A jury awarded former Minnesota Gov. Jesse Ventura $1.8 million on Tuesday in his lawsuit against the estate of "American Sniper" author Chris Kyle.
    Former Minnesota Gov. Jesse Ventura won $1.8 million Tuesday in his two-year fight to prove he was defamed by a military sniper and best-selling author who claimed to have punched out Ventura at a bar for bad-mouthing the...
  • Last crew member of Enola Gay dies in Georgia

    Last crew member of Enola Gay dies in Georgia

    Tuesday, July 29 2014 5:34 PM EDT2014-07-29 21:34:51 GMT
    The last surviving member of the crew that dropped an atomic bomb on Hiroshima has died in Georgia.
    The last surviving member of the crew that dropped an atomic bomb on Hiroshima has died in Georgia.
  • Obama to announce US sanctions on Russia

    Obama to announce US sanctions on Russia

    Tuesday, July 29 2014 3:44 PM EDT2014-07-29 19:44:47 GMT
    President Barack Obama is expected to announce a new round of U.S. sanctions against Russia Tuesday.
    President Barack Obama is to announce a new round of U.S. sanctions against Russian banks and a shipbuilding company Tuesday.
  • Franklin County accident causes lane closures on Brooks Mill Road

    Franklin County accident causes lane closures on Brooks Mill Road

    Franklin County accident causes lane closures on Brooks Mill Road

    Wednesday, July 30 2014 5:16 AM EDT2014-07-30 09:16:44 GMT
    FRANKLIN COUNTY (WSLS) - State Police are on the scene of an accident on Brooks Mill Road (Rt. 834) near the Ponderosa campground.
    FRANKLIN COUNTY (WSLS) - State Police are on the scene of an accident on Brooks Mill Road (Rt. 834) near the Ponderosa campground.
  • Fugitive sex offender captured in Roanoke

    Fugitive sex offender captured in Roanoke

    Fugitive sex offender captured in Roanoke

    Wednesday, July 30 2014 12:41 AM EDT2014-07-30 04:41:44 GMT
    ROANOKE (WSLS) - A man wanted for sex crimes against a minor was captured in Roanoke during a traffic stop.
    ROANOKE (WSLS) - A man wanted for sex crimes against a minor was captured in Roanoke during a traffic stop.
  • Roanoke Police investigate shots fired incident

    Roanoke Police investigate shots fired incident

    Tuesday, July 29 2014 10:37 PM EDT2014-07-30 02:37:03 GMT
    On July 29, 2014 at 6:08 p.m. Roanoke Police were dispatched to the 1200 block of Orange Avenue NE to investigate a shots fired call. Immediately upon arrival officers detained several subjects believed to have been involved in the incident. The preliminary investigation suggests the individuals involved were traveling in two different vehicles on Hollins Road when at least one of the occupants in one of the vehicles starting shooting at the other vehicle. The vehicles separated briefly and t...
    On July 29, 2014 at 6:08 p.m. Roanoke Police were dispatched to the 1200 block of Orange Avenue NE to investigate a shots fired call. Immediately upon arrival officers detained several subjects believed to have been involved in the incident. The preliminary investigation suggests the individuals involved were traveling in two different vehicles on Hollins Road when at least one of the occupants in one of the vehicles starting shooting at the other vehicle. The vehicles separated briefly and t...
Powered by WorldNow

WSLS 10, P.O. Box 10
Roanoke, VA 24022-0010

Telephone: 540.981.9110
Fax: 540.343.3157
Email: news@wsls.com

Can't find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.