All Sections
Welcome guest, you have 3 views left.  Register| Sign In

Home | Business

S&P 500 ends at record on mergers


May 27. 2014 8:11PM

NEW YORK — Stocks rose on Tuesday as the S&P 500 scored a second straight record close, buoyed by the latest round of merger activity and as expectations for rate cuts by the European Central Bank stoked investors’ appetite for equities.

ECB chief Mario Draghi said on Monday the bank must be “particularly watchful” for any negative price spiral in the euro zone. His comments increased bets that the bank was ready to cut rates next week to counter low inflation and weak lending in the euro zone, keeping asset purchases as an option.

U.S. markets, which were closed Monday for Memorial Day, had to digest the ECB news.

“(It’s) a rate cut or some sort of nonconventional stimulus,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “No question about it, we had to catch up from yesterday.”

The data also supported equities. Orders for durable goods, which are U.S. manufactured goods meant to last three years or more, unexpectedly rose in April, and consumer confidence perked up in May, backing views of a rebound in economic growth.

“Durable goods was what came out early and that set a very positive tone for the market, especially since the prior numbers were revised sharply higher,” said Tim Ghriskey, of Solaris Group in Bedford Hills, New York.

The Russell 2000 and Nasdaq Composite outperformed other major indexes on Tuesday, as they did handily last week, indicating a rotation out of small caps and growth shares could be over. The Russell rose 1.4 percent, its fourth straight advance and sixth gain in the past seven sessions.

The Dow Jones industrial average gained 69.23 points or 0.42 percent, to end at 16,675.50. The S&P 500 advanced 11.38 points.


More Headlines