NEW YORK, (Reuters) – Wall Street rose modestly today, lifting the Dow to another record and giving the S&P 500 its seventh straight advance as early weakness enticed buyers. The gains briefly lifted the benchmark S&P 500 index to its highest intraday level since October 2007.
With the slight advance, U.S. stocks continued last week’s rally that took the Dow Jones industrial average to record highs. The S&P 500’s record closing high stands at 1,565.15, which it reached on Oct. 9, 2007.
Wall Street’s “fear gauge” closed at its lowest level since February 2007, suggesting investors were not spooked by Monday’s brief pullback, despite expectations by many investors that a correction may be looming. The CBOE Volatility Index, known as the VIX, dropped 8.2 percent to 11.56.
U.S. equities have rallied strongly since the start of the year, helped by signs of improvement in the economy and the support of equities by the Federal Reserve’s quantitative easing program. These factors have contained recent pullbacks as investors have used them as a buying opportunity.
“These dips are consistently bought. There is definitely a soft floor for the market,” said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
“It’s a QE bid,” Kenny said, referring to the Fed’s policy of keeping short-term interest rates near zero since late 2008. “Quite frankly, earnings have not disappointed to the point where it is has been disrupted, and there is nothing out there that seems to be getting in the way of this slow but very consistent and methodical drift higher in the market.”
But volume was light, with about 5.39 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, below the daily average of 6.47 billion, suggesting the rally may be losing steam.
On Monday, the S&P 500 climbed as high as 1,556.27 – its highest intraday level since Oct. 15, 2007.
The Dow has gained over 10 percent for the year, while the S&P 500 is up more than 9 percent.
Wall Street had traded slightly lower earlier in the day as Italy’s credit downgrade and disappointing Chinese economic data gave investors a reason to pause.
The Dow Jones industrial average gained 50.22 points, or 0.35 percent, to 14,447.29, a record closing high. The Standard & Poor’s 500 Index rose 5.04 points, or 0.32 percent, to 1,556.22. The Nasdaq Composite Index added 8.51 points, or 0.26 percent, to close at 3,252.87.
Earlier in the session, the Dow reached another lifetime intraday high, rising as high as 14,448.06.
Boeing Co rose to $83.03, its highest level since May 2008, after the U.S. aircraft manufacturer said strong demand was prompting it to increase its production rates of commercial planes. The stock, which rose 2 percent to $82.94 at the close, was the Dow’s biggest percentage gainer. Boeing also gave the biggest boost to the Dow in Monday’s session.
The U.S.-listed shares of BlackBerry surged 14.1 percent to $14.90 after AT&T said it will start selling the company’s new BlackBerry Z10 touchscreen smartphone in the United States on March 22.
Dell Inc has agreed to give Carl Icahn a closer look at its books less than a week after the activist investor joined a growing chorus of opposition to founder Michael Dell’s plan to take the world’s No. 3 personal computer maker private. Dell shares gained 1.5 percent to $14.37, above the take-private offer price of $13.65.
Genworth Financial Inc shares jumped 6.7 percent to $10.50 following a report by Barron’s that the mortgage insurer’s stock could almost double in the next year, boosted by gains in mortgage and healthcare pricing.
In contrast, Dick’s Sporting Goods Inc tumbled 10.8 percent to $45.11 after the retailer reported lower-than-expected fourth-quarter results and gave a disappointing forecast.
Advancing stocks outnumbered declining ones on the NYSE by 1,586 to 1,375, while on the Nasdaq, advancers beat decliners by 1,254 to 1,192.
