S&P 500 climbs to record on optimism over stimulus, earnings

U.S. stocks rallied, sending the Standard & Poor’s 500 Index to its highest level ever, as China’s imports grew, Japan reiterated its stimulus plans and investors speculated earnings will beat estimates.

All 10 industries in the S&P 500 advanced, with technology and health-care companies rallying more than 1.7%. The Nasdaq Composite Index, which counts on computer and software makers for about half its weighting, surged 1.8%. Intel Corp. and Micron Technology Inc. jumped at least 2.3% as Taiwan Semiconductor Manufacturing Co. predicted a rebound in industry sales. Citigroup Inc. and JPMorgan Chase & Co. added more than 1.2%, pacing gains among financial shares.

The S&P 500 rose 1.2% to 1,587.73 at 4 p.m. in New York, as minutes of the latest Federal Reserve meeting showed officials debated when to curtail stimulus efforts. The Dow Jones Industrial Average climbed 128.78 points, or 0.9%, to a record 14,802.24. About 6.2 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“A lot of it is sentiment,” Rex Macey, who oversees $20 billion as chief investment officer at Wilmington Trust Investment Advisors in Atlanta, said by telephone. “People who were not in the market and people had been nervous are starting to feel as if it’s safe to go back in the water. They don’t feel there is a recession around the corner,” he said. “The market is expecting some bad reports for earnings. We think there might be some surprise to the upside.”

‘Bold’ Easing

Imports to China rose 14.1% in March from the year earlier, leaving the nation with an unexpected trade deficit. In Japan, Prime Minister Shinzo Abe said “bold monetary easing” will reverse persistent deflation in his nation. Bank of Japan Governor Haruhiko Kuroda said the central bank will take all steps necessary to meet a 2% inflation target even as he indicated policy adjustments are unlikely every month. The European Central Bank will keep rates low and continue injecting liquidity into the banking system, Governing Council member Christian Noyer said on Europe 1 radio.

The S&P 500 jumped the most since Feb. 27 today, topping a record intraday high of 1,576.09 set in October 2007. The index has more than doubled from its 12-year low in March 2009, helped by the Fed’s unprecedented bond purchases and three straight years of profit growth.

Several Fed officials said the central bank should taper its bond-buying program later this year and stop it by the end of 2013 if labor market conditions improve, according to minutes from the March meeting released today. Fed Chairman Ben S. Bernanke said on April 8 that economic conditions were far from where he would like them to be.

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