S&P 500 closes above 2,000; markets rise to new record

S&P 500 closes above 2,000; markets rise to new record

August 27th, 2014 by Associated Press in Business Around the Region

The Standard & Poor's 500 index closed a hair above 2,000 points Tuesday, 16 years after it finished above 1,000 for the first time.

The move extended the stock index's record-shattering run this year. The latest milestone comes as investors see new signs that the economy is strengthening, a driver of stronger company earnings.

"There's perhaps a small psychological boost when you get over such a significant price level," said Cameron Hinds, regional chief investment officer at Wells Fargo Private Bank.

U.S. stocks, in the midst of a five-year rally, have surged in the final weeks of the summer after dipping earlier this month on concerns about geopolitical tensions in Ukraine and the Middle East.

The Conference Board said Tuesday that its consumer confidence index rose this month to the highest point in nearly seven years. A separate report showed that orders of durable manufactured goods surged by a record 22.6 percent in July. A third report showed U.S. home prices rose in June, although at a slower pace.

The Dow Jones Industrials is only 32 points shy of its own record closing high set July 16. The Nasdaq is still well below its dot-com era record.

The S&P 500 index, a widely followed barometer of the stock market, has closed at a new high 30 times this year. The S&P 500 is trading around 16 times the earnings companies in the index are expected to make over the next 12 months. The historical average on that measure is about 15 times.

"That says stocks are no longer cheap, but we also don't think they're expensive," said Kate Warne, an investment strategist at Edward Jones.