Market Wrap: S&P 500 Touches 2,000 as Deals Continue

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stock market floor
AP/Richard Drew
By ALEX VEIGA

Summer doldrums? Not on Wall Street.

The stock market notched another first on Monday as the Standard & Poor's 500 index nudged briefly past the 2,000-point mark and closed with its second record high in a week.

It was the latest milestone in a five-year rally for U.S. stocks, which are enjoying a late-summer revival after dipping earlier this month on concerns about rising geopolitical tensions in Russia and the Middle East.

Investors have put aside those concerns for now, focusing instead on the improving outlook for the U.S. economy and the prospect of rising corporate earnings.

On Monday, traders were encouraged by some high-profile corporate deal news, which overshadowed sluggish sales of new homes.

News that Burger King (BKW) is in talks to acquire doughnut chain Tim Hortons (THI) and create a new holding company headquartered in Canada had stocks pointing higher in premarket trading. That built on word over the weekend that California biotech company InterMune (ITMN) agreed to sell itself to Swiss pharmaceutical company Roche for $8.3 billion. Some other names in biotech got a boost from the deal.

Shortly after the market opened, the Commerce Department reported that sales of new homes slid 2.4 percent last month to a seasonally adjusted annual rate of 412,000. Homebuilder stocks declined, but the report didn't weigh down the broader market.

The S&P 500 (^GPSC), a widely followed barometer of the U.S. stock market, crossed above 2,000 in the first hour of trading.

The index fluctuated above and below the milestone mark throughout the day and ended just below the 2,000 mark. The index closed above 1,000 points for the first time in February 1998.

"The index number itself is somewhat symbolic," said David Kelley, JPMorgan Funds' chief global strategist. "It's a continuation of what we've seen all year."

All told, the S&P 500 added 9.52 points, or 0.5 percent, to 1,997.92. It closed at a record last Thursday at 1,992.37.

The Dow Jones industrial average (^DJI) rose 75.65 points, or 0.4 percent, to 17,076.87. The Nasdaq composite (^IXIC) gained 18.80 points, or 0.4 percent, to 4,557.35.

The major U.S. indexes are riding a three-week streak of weekly gains and are up for the year.

Stocks, with support from the Federal Reserve's easy-money policies, have been on a bull run for more than five years after the market bottomed out during the Great Recession in March, 2009.

"Unless the story changes, the stock market is going to get pushed higher by the lack of potentially good returns elsewhere," Kelley said.

Corporate deals have been a recurring driver of the market this year. Investors seized on the trend on Monday, sending Burger King up 19.5 percent. The stock added $5.29 to $32.40.

Bond prices rose. The yield on the 10-year Treasury note slipped to 2.38 percent from 2.40 percent late Friday.

AP Business Writers Steve Rothwell contributed from New York and Youkyoung Lee contributed from Seoul, South Korea.

What to Watch Tuesday:
  • The Commerce Department releases durable goods for July at 8:30 a.m. Eastern time
  • The Standard & Poor's releases S&P/Case-Shiller index of home prices for June and the second quarter at 9 a.m.
  • The Conference Board releases the Consumer Confidence Index for August at 10 a.m.
These major companies are scheduled to release quarterly financial statements:
  • Best Buy (BBY)
  • Bob Evans Farms (BOBE)
  • DSW (DSW)
  • Smith & Wesson Holding (SWHC)
  • TiVo (TIVO)

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4 Comments

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SPQR

This merely reflects all the money pumped into the economy by the Feds.

Big mistake except for the lucky people and the 1 % who have made a killing ...that is if they sell.

Watch out because the BIG selloff is a cumin !!!

August 25 2014 at 5:01 PM Report abuse +2 rate up rate down Reply
2 replies to SPQR's comment
truu.liberal

The money that the Fed has created is largely sitting idle in excess bank reserves at the Fed. As a result, so far it's done somewhere between little and nothing as it relates to its impact on either the economy or the equity markets. That's actually good news because besides meaning it's been of no benefit, it also means it's caused no harm........yet

August 25 2014 at 7:57 PM Report abuse +1 rate up rate down Reply
merstockgto

There always sell offs so what else new. If you are sitting by the sidelines doing nothing you are the loser.

August 25 2014 at 11:44 PM Report abuse -1 rate up rate down Reply
1 reply to merstockgto's comment
Big John

Getting swindled in the last big meltdown really makes you a loser. I lost nothing and was making 6% for five years during this mess and not in the market, is that being a loser?

August 27 2014 at 4:42 PM Report abuse rate up rate down