U.S. stocks rose for the week, sending the Standard & Poor’s 500 Index to a record, as data bolstered confidence in the world’s largest economy while concern over Europe’s debt crisis faded.
All 10 groups in the S&P 500 rallied, as health-care and utility companies led gains. Visa Inc. surged 6.1 percent to a record after Nomura Holdings Inc. said a shift away from cash would help the bank-card network. Biogen Idec Inc. jumped 8.2 percent to an all-time high after winning U.S. approval for its first multiple sclerosis pill. McGraw-Hill Cos. rose 7.7 percent after announcing a $500 million share buyback.
The S&P 500 added 0.8 percent to 1,569.19 for the week, surpassing the previous all-time high set in October 2007 of 1,565.15. The benchmark index ended the first quarter with a gain of 10 percent, its best performance in a year. The Dow Jones Industrial Average jumped 66.51 points, or 0.5 percent, to 14,578.54, also a record. U.S. financial markets had a shortened week because of the Good Friday holiday.
“More than anything, economic news hasn’t been as bad as a lot of people have predicted,” Thomas Garcia, head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc., said by telephone. His firm oversees about $80 billion. “The market has just been resilient. Cyprus tried to take down the market. There have been reasons for the market to go down and we sit here at all-time highs.”
The S&P 500 (SPX)’s advance above its record marks the recovery from a bear market that wiped more than $10 trillion of value from the world’s largest stock market. The measure has surged 132 percent from its March 2009 low as profits expand for a third straight year and the Federal Reserve commits to continuing its unprecedented monetary stimulus.
A 5.7 percent jump in durable goods orders and the biggest increase since 2006 for the S&P/Case-Shiller index of home prices were among the latest data points to fuel optimism in the economy. Gross domestic product rose at a 0.4 percent annual rate in the fourth quarter, up from a 0.1 percent prior estimate, revised Commerce Department figures showed.
Concern over Cyprus eased after the nation’s banks reopened for the first time in almost two weeks on March 28. Earlier in the week, the Mediterranean island’s struggles to stave off financial collapse reignited speculation Europe’s debt crisis may intensify.
The Chicago Board Options Exchange Volatility Index (VIX), which measures the cost of using options as insurance against claims, slumped 6.4 percent during the week to 12.70. The gauge, known as the VIX, surged 20 percent in the prior week amid concern about Europe. It is down 30 percent for the year.
“There’s no doubt that a new record high will continue to give the bulls something to hang their hats on,” Jordan Irving, who helps oversee $175 million at Irving Magee Investment Management in Philadelphia, said by phone. “People are just sort of letting things ride coming into the quarter’s end, and we’ll see next week whether or not the market is really as resilient as it appears to be in terms of shrugging off all this news coming out of Europe.”
Health-care stocks posted the biggest advance out of 10 S&P 500 groups, increasing 2.4 percent. UnitedHealth Group Inc. rallied 5.1 percent to $57.21. The biggest U.S. medical insurer and Humana Inc. rose after congressional researchers said the Medicare program has the authority to raise payments to insurers. Humana added 3 percent to $69.11.
Utility and consumer-staple companies also rose, climbing 2.4 percent and 1.1 percent, respectively.
Intel Corp. rose 2.4 percent to $21.84. The world’s largest chipmaker is making progress in talks with Time Warner Inc., NBC Universal and Viacom Inc. to obtain TV shows and films for a first-of-its-kind online pay-TV service, according to people with knowledge of the situation.
Visa surged 6.1 percent to $169.84, the highest price since the company’s March 2008 initial public offering. Nomura analysts Bill Carcache and Tulu Yunus said a long-term global shift away from cash would help Visa at the expense of Western Union Co.
Biogen Idec jumped 8.2 percent to an all-time high of $192.62. The fourth-largest U.S. biotechnology company by market value won marketing approval from the Food and Drug Administration for the multiple sclerosis pill Tecfidera. The drug may generate $3.25 billion in annual revenue by 2017 for the Weston, Massachusetts-based company, according to the average of eight analysts’ estimates compiled by Bloomberg.
McGraw-Hill rose 7.7 percent to $52.08. The company said some of the proceeds from the $2.4 billion sale of its education division to Apollo Global Management LLC will be used to fund a $500 million accelerated share repurchase (MHP:US).
Financial stocks had the worst performance out of 10 S&P 500 groups, increasing 0.1 percent. The KBW Bank Index lost 0.6 percent, declining for the second straight week. Bank of America Corp., the second-largest U.S. bank by assets, tumbled 3 percent to $12.18 for the biggest drop in the Dow. JPMorgan Chase & Co., the biggest bank, erased 2.7 percent to $47.46.
Cliffs Natural Resources Inc. slid 8.4 percent to $19.01 for the biggest drop in the S&P 500. The largest U.S. iron-ore miner tumbled after analysts at Morgan Stanley and Credit Suisse Group AG said new supply in North America may reduce the commodity’s price.
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