The Standard & Poor’s 500 Index rose above its record closing level, wiping out losses from the financial crisis, as economic growth slowed less than previously estimated and concern about Europe’s debt crisis eased.
McDonald’s Corp. and International Business Machines Corp. jumped at least 0.6% to pace advances among the biggest companies. GameStop Corp. rallied 4.9% after quarterly profit topped estimates. Deckers Outdoor Corp. increased 6.4% after Jefferies Group Inc. raised its price target. BlackBerry climbed 2.2% after reporting fourth-quarter results. Banks retreated, as Bank of America Corp. and Morgan Stanley lost at least 0.7%.
The S&P 500 increased 0.3% to 1,567.23 at 2:42 p.m. in New York, above its all-time closing high of 1,565.15 from Oct. 9, 2007. The Dow Jones Industrial Average climbed 34.51 points, or 0.2%, to 14,560.67. Trading in S&P 500 shares was 22% below the 30-day average at this time of day. U.S. markets will be closed tomorrow for a holiday.
“It’s about time,” said Robert Lutts, the president and chief investment officer at Cabot Money Management Inc., which oversees $500 million in Salem, Massachusetts. “We’ve gone through two bear markets in the last decade and equity investors have been really challenged in their conviction to hold through that period of time, but I think that we’re at the beginning of a very strong phase for equities, not at the end.”
The S&P 500’s advance above its record close marks a recovery from a bear market that wiped out more than $10 trillion of value from the world’s largest stock market. The gauge is up 9.9% for the quarter, its best performance in a year. It still remains below an all-time intraday high of 1,576.09. The Dow first surpassed its 2007 high on March 5.
Shares of American companies are rallying as their profits expand for a third straight year and the Federal Reserve commits to continuing its unprecedented monetary stimulus. Reports this week showing a 5.7% jump in durable goods orders and the biggest increase since 2006 for the S&P/Case-Shiller index of home prices in 20 cities were among the latest data points to fuel optimism in the economy.
Gains today came as gross domestic product rose at a 0.4% annual rate in the last three months of 2012, up from a 0.1% prior estimate and following a 3.1% pace in the third quarter, revised Commerce Department figures showed today. The reopening of banks in Cyprus after being closed since March 16 eased concern about Europe’s debt crisis. German retail sales, adjusted for inflation and seasonal swings, gained 0.4% last month from January.
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