Business

S&P 500 Closes Above 2000

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stock-marketStocks increased on Tuesday enough to lift the S&P 500 above the 2,000 mark, the first time it has closed above this milestone, after data was revealed that indicated a brighter economic outlook in the near future.

Energy shares were the leaders for the days increase. The S&P energy index rose by 0.5% and was ranked as the best performer out of the 10 major sectors.

The intraday high for the S&P 500 was 2,005.04, climbing above 2,000 for the second day in a row. On Monday however, the landmark number didn’t hold and dropped to 1,997.92 by the end of the day. With Tuesday’s close both the S&P and the Dow have risen in 10 of the last 13 sessions, the Nasdaq is up for 11 out of 13 sessions.

But, a lot of the recent market gains are on low volume, which might indicate that traders are reluctant to wade in at current levels.

Jess Kravetz, regional investment director with U.S. Bank Wealth Management in Phoenix, said, “We will have to wait and see. Volume this week is very light; we have a lot of people still on vacation. But economically and fundamentally, it is a good picture.”

Consumer confidence in the U.S. rose more than anticipated for August, climbing to the highest levels since October 2007 according to the Conference Board. The Commerce Department also reported that U.S. durable goods orders increased by 22.6% in July, the biggest rise on record. But, this number was skewed by the strong international demand for aircraft.

Says Kravetz, “Even though that (durables) number is lopsided and kind of skews the picture, when you have more aircraft orders and auto sales, in the long run, those are positives. That shows the economy is recovering and there are some good prospects.”

This trend higher is seen as intact. The S&P’s price to earnings ratio is within normal historical limits, which is leading many analysts to feel that stocks are not overvalued. Despite these positive signs, further pronounced gain could be a challenge with the simmering conflict between Ukraine and Russia as well as a reduction in Federal Reserve stimulus.

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