Wall Street hits new highs, led by financials

NDTV Profit Desk

14 May 2013, 10:20 PM IST

Wall Street rose and extended a recent rally on Tuesday, with the Dow and the S&P 500 hitting new intraday highs as investors bet that the market's upward momentum would keep going.

Gains were broad, with more than two-thirds of New York Stock Exchange-listed companies' shares rising and almost 640 securities hitting 52-week highs, including Chevron Corp and Visa Inc.

Growth-orientated stocks were among the day's biggest advancers, with large-cap bank stocks leading the way. Bank of America, up 2.6 per cent at $13.32, was the Dow's biggest gainer. Citigroup Inc rose 2.2 per cent to $49.98. Goldman Sachs advanced 3.4 per cent to $154.67 while Wells Fargo & Co added 1.1 per cent to $38.63.

Wall Street has climbed for the past three weeks. The S&P 500 is up almost 16 per cent so far this year, propelled in large part by the Federal Reserve's easy monetary policy, designed to stimulate the economy.

"We're riding a self-fulfilling prophecy of momentum. There's no fundamental reason for today's move, other than the continued easing by the Fed and momentum," said Paul Radeke, vice president at Minneapolis-based KDV Wealth Management.

While some analysts expect the momentum to wane in the near term, as equities haven't undergone a significant pullback this year, many say that the long-term trend remains positive as investors keep using any market decline as a buying opportunity.

"The sheer volume of cash coming in from the sidelines is preventing any kind of correction, even though fundamentally we seem to be getting overbought," said Mr Radeke, who helps oversee $400 million in assets.

The Dow Jones industrial average rose 95.73 points, or 0.63 per cent, to 15,187.41.

The Standard & Poor's 500 Index climbed 15.65 points, or 0.96 per cent, to 1,649.42.

The Nasdaq Composite Index advanced 29.39 points, or 0.85 per cent, to 3,468.18.

Earlier in the session, the Dow hit an all-time intraday high at 15,191.60, while the S&P 500 reached an all-time intraday high at 1,649.71.

The Dow's gains were limited by weakness in Caterpillar Inc, down 0.8 per cent at $87.56, and UnitedHealth Group, off 0.8 per cent at $61.90.

The market had been trading sideways for three sessions, showing a gain of 0.07 per cent as the winding down of the quarterly earnings season and a light economic calendar have left investors without a strong catalyst for further gains.

Economic data showed import prices slipped 0.5 per cent last month because of a drop in oil costs, the biggest decline since December, and matching Wall Street's expectations.

US-listed shares of Sony Corp jumped 10.3 per cent to $20.83 after billionaire hedge fund investor Daniel Loeb called on the company to spin off its lucrative entertainment arm.

Nokia Corp unveiled a new version of its Lumia smartphone line, but US-listed shares fell 5.3 per cent to $3.64. Research company Gartner said Nokia lost 5 percentage points of market share in the first quarter, falling to 14.8 per cent.

Solar power companies' shares fell on the day after Trina Solar Ltd estimated lower panel shipments than a previous outlook and said its results would be hurt by a foreign currency exchange loss. The stock fell 7.3 per cent to $5.50 while Yingli Green Energy slid 4.4 per cent to $2.41.

Most corporate earnings have been better than expected this quarter. With 90 per cent of the S&P 500 companies having reported results so far, 67.2 per cent have topped earnings expectations, according to Thomson Reuters data, which is even with the average over the past four quarters. However, only 46.9 per cent have beaten revenue expectations, below the 52 per cent average over the past four quarters.