THE BENCHMARK S&P 500 index hit its highest level in more than four years yesterday, spurred by solid gains in energy, technology and financial stocks.
The S&P has now risen more than 11 per cent since early June. The wealth effect generated by a buoyant US stock market could also provide a timely boost for the Obama administration in what is expected to be a closely fought election in November.
The rally has gathered steam as investors await efforts by the European Central Bank next month to contain the euro zone crisis.
A better tone in US economic data recently and further easing from the Federal Reserve have also bolstered the S&P.
“The strong run by stock markets since the June lows have been fuelled largely by expectations of further central bank stimulus and a game changer from European policy makers,” said John Praveen, chief investment strategist at Prudential Investments Advisers.
By midday in New York, the S&P was up 0.2 per cent at 1,421 – having earlier reached a high of 1,426 – and was primed for its best close since May 2008.
The benchmark has risen 13 per cent since January and is only 9 per cent below its all-time closing high of 1,562.47, set in October 2007. Including the reinvestment of dividends, the market has surpassed its 2007 peak by 1 per cent.
Low equity volumes have typified the August rally led by tech shares, with Apple touching a record high of $674.88 and now alone accounting for nearly 5 per cent of the S&P.– (Copyright The Financial Times Limited 2012)
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