Stocks jumped, sending the Dow Jones Industrial Average to a record, and metals rose as China vowed to maintain its growth target, U.S. service-industry growth improved and investors bet central banks will continue stimulus measures. Treasuries fell and the dollar weakened.
The Dow climbed 125.95 points, or 0.9%, to 14,253.77 and the Standard & Poor’s 500 Index added 1% as of 4 p.m. in New York. The Stoxx Europe 600 Index jumped to a four-year high while the Shanghai Composite Index rebounded 2.3% from its biggest loss since August 2011. The S&P GSCI gauge of 24 commodities halted a five-day slump as oil rebounded after dipping below $90 a barrel yesterday for the first time this year. Italian and Portuguese bonds rallied.
About $10 trillion has been restored to U.S. equities in the past four years as retailers, banks and manufacturers led the recovery from the worst bear market since the 1930s. It took the Dow less than 65 months to rise above its previous high set on Oct. 9, 2007, more than a year faster than the recovery from the Internet bubble.
“It’s nice to know that we’ve recovered from the losses of the financial crisis, but it doesn’t impart any meaning as to where do we go far from here,” Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which oversees about $130 billion in assets, said by telephone. “The more interesting questions to ask are what’s happening with fundamentals? We think they’re improving. What about valuations? We think they’re reasonable.”
The S&P 500 climbed within 2% of its record closing level of 1,565.15 set on Oct. 9, 2007, the same day the Dow set its previous record of 14,164.53. Among U.S. stocks moving today, BMC Software Inc. jumped after people with knowledge of the matter said the company has attracted renewed buyout interest. American Apparel Inc. climbed after forecasting sales for this year that exceeded estimates. J.C. Penney Co. slipped after its second-biggest shareholder sold part of its stake.
Equities extended gains today after the Institute for Supply Management’s non-manufacturing index increased to 56 last month from 55.2 in January. Economists projected the gauge would be little changed at 55, according to the Bloomberg survey median. Readings above 50 signal expansion.
Federal Reserve Vice Chairman Janet Yellen said yesterday the U.S. central bank should press on with $85 billion in monthly bond buying while tracking possible costs and risks from the unprecedented program. The European Central Bank will probably keep its benchmark rate unchanged at its meeting this week, according to a Bloomberg survey.
Cisco Systems Inc., United Technologies Corp. and American Express Co. helped lead the Dow’s gain today. The 30-stock average erased losses from the financial crisis after a four- year rally fueled by the fastest profit growth since the 1990s and monetary stimulus from the Fed.