60° Good Morning
60° Good Morning

S&P 500 index moves above its record high

A trader signals an offer in the S&P

A trader signals an offer in the S&P options pit at the Chicago Board Options Exchange. The S&P’s new closing record and the resurgent Dow Jones offer positive signs for the economy, analysts say. (March 20, 2013) Photo Credit: Getty

The stock market marched past another milepost Thursday on its long, turbulent journey back from the recession, toppling a record left over from the days before government bailouts and failing investment banks.

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

The S&P capped its best quarter in a year, rising 10 percent, and the Dow had its best first quarter in 15 years, climbing 11 percent. Thursday marked the end of the first quarter, since markets are closed for Good Friday.

The numbers offer more evidence that investors believe the economy is on the mend, said Sam Stovall, chief equity strategist at S&P Capital IQ.

"The low-flying recovery is gaining altitude," Stovall said, citing a truism that rising stock prices come first, then the economy catches up.

Thursday's performance was driven by strong economic data. Companies are making record profits quarter after quarter. They're hiring in greater numbers, and the national housing market is finally recovering.

The Fed has helped, too. By keeping interest rates near record lows, the central bank has encouraged people to move money out of savings accounts that pay next to nothing and into stocks and other investments.

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: "Markets are volatile, and if you are a long-term investor you should expect declines."

Thursday, the S&P 500 rose 0.41 percent to 1,569.19, beating by four points its previous record of 1,565.15 set on Oct. 9, 2007. The Dow rose 52.38 points to close at 14,578.54. The Nasdaq rose 0.34 percent to 3,267.52.

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 market gain of six points would go unheralded but not after the turmoil that began in late 2008 and persisted through a slow, sometimes stalled recovery.

More news