S&P 500 Index Closes at a Five-Year High

S&P 500 index closes at a five-year highBy STEVE ROTHWELL

NEW YORK (AP) - The Standard & Poor's 500 closed at its highest in five years Friday after a report showed that hiring held up in December, giving stocks an early lift.

The S&P 500 finished up 7.10 points at 1,466.47, its highest close since December 2007.

The index began its descent from a record close of 1,565.15 in October 2007, as the early signs of the financial crisis began to emerge. The index bottomed out in March 2009 at 676.53 before staging a recovery that has seen it more than double in value and move to within 99 points of its all-time peak.

The Dow Jones industrial average finished 43.85 points higher at 13,435.21. It gained 3.8 percent for the week, its biggest weekly advance since June. The Nasdaq closed up 1.09 point at 3,101.66.

Stocks have surged this week after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the "fiscal cliff." The law passed late Tuesday night averted that outcome, which could have pushed the economy back into recession.

The Labor Department said U.S. employers added 155,000 jobs in December, showing that hiring held up during the tense fiscal negotiations in Washington. It also said hiring was stronger in November than first thought. The unemployment rate held steady at 7.8 percent.

The jobs report failed to give stocks more of a boost because the number of jobs was exactly in line with analysts' forecasts, said JJ Kinahan, chief derivatives trader for TD Ameritrade.

"The jobs report couldn't have been more in line," Kinahan said. "The market had more to lose than to gain from it."

Among stocks making big moves, Eli Lilly and Co. (LLY) jumped $1.84, or 3.7 percent, to $51.56 after saying that its earnings will grow more than Wall Street expects, even though the drugmaker will lose U.S. patent protection for two more product types this year.

Walgreen Co. (WAG), the nation's largest drugstore chain, fell 61 cents, or 1.6 percent, to $37.18 after the company said that a measure of revenue fell more than analysts had expected in December, even as prescription counts continued to recover.

Stocks may also be benefiting as investors adjust their portfolios to favor stocks over bonds, said TD Ameritrade's Kinahan. A multi-year rally in bonds has pushed up prices for the securities and reduced the yield that they offer, in many cases to levels below company dividends.

Goldman Sachs reaffirmed its view that stocks "can be an attractive source of income," and warned that there is a risk that bonds may fall. In a note to clients, the investment bank said that an index of AAA rated corporate bonds offers a yield of just 1.6 percent, less than the S&P 500's dividend yield of 2.2 percent.

The 10-year Treasury note fell, pushing its yield higher. The yield on the 10-year note fell 2 basis points to 1.91 percent. The note's yield has now climbed 52 basis points since falling to its lowest in at least 20 years in July.

Other notable stock moves;

- Accuray Inc. (ARAY) plunged $1.37, or 20 percent, to $5.41 after the radiation oncology equipment company reported weak sales and said it would cut 13 percent of its staff.

- Lululemon (LULU), a yoga apparel maker, dropped $3.14, or 4.2 percent, to $71.95 after Credit Suisse predicted slowing momentum and downgraded its stock.

- Finish Line Inc. (FINL), an athletic footwear and clothing company, fell $1.58, or 8.3 percent, to $17.18 after it reported a small loss after sneaker trends changed and customers didn't take to its new web site launched in November. Analysts had forecast a profit.


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7 Comments

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progressivehoax

Fire more Liberal Regressive Dummycraps

January 06 2013 at 3:13 PM Report abuse +2 rate up rate down Reply
mcpogo

Hyping up the S&P 500 Index will simply draw a lot bigger bunch of fools into the game before this imaginary bubble "magically" bursts when the 1% can grab the most profit.

January 05 2013 at 4:37 PM Report abuse +2 rate up rate down Reply
eyeforeye42

Remember where the country was at this time 4 years ago under W and his conservative GOP with the stock market at close to 7,900 (Those awful liberals, look what they have done to the market! took it from 7,900 to 13,435. Shameful isn't? It's all Obama's fault!

January 04 2013 at 7:50 PM Report abuse +5 rate up rate down Reply
mattgarodan

Woohoo!

January 04 2013 at 7:04 PM Report abuse rate up rate down Reply
sfisher951

This is great news and people should be happy, but I'm betting there will be a lot of comments saying that it means nothing. Of course - - - if the market had gone down, these same people would be saying that it was all Obama's fault.

January 04 2013 at 6:17 PM Report abuse +4 rate up rate down Reply
scottee

means nothing
virtual news
virtual statistics
virtual dollar

January 04 2013 at 5:48 PM Report abuse -4 rate up rate down Reply
1 reply to scottee's comment
itacurubi

My dollars aren't virtual. I went to Starbuck's today and exchanged some for a coffee; then I went to the supermarket today and exchanged them for real stuff, finally, I stopped at the wine and spirits store and exchanged more of them for some Australian wine and Canadian whiskey. Nothing virtual about that.

Think more. Emote less.

January 04 2013 at 6:23 PM Report abuse +7 rate up rate down Reply