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S&P 500 index notches another record close

Source: Agencies | December 10, 2013, Tuesday | Online Edition

The stock market notched another record close yesterday after a big acquisition in the food industry. Hope for a longer-term budget deal in Washington also helped.

Food distributor Sysco rose the most in the Standard & Poor's 500 index after the company announced an agreement to buy rival US Foods in an US$8.2 billion deal. Sysco's stock jumped US$3.31, or 9.7 percent, to US$37.62.

Stocks extended a rally from Friday that was driven by a report of solid US job gains. That boosted investor confidence that the economy was growing strongly enough to handle any pullback in the Federal Reserve's economic stimulus.

"We're just continuing the bullishness that we've had," said Rex Macey, Chief Investment Officer of Wilmington Trust Investment Advisors, a unit of Wilmington Trust Bank.

The S&P 500 index climbed 3.28 points, or 0.2 percent, to 1,808.37. That put the index a point above its previous record close of 1,807.23 set November 27.

Other indexes also made small gains. The Dow Jones industrial average rose 5.33 points, less than 0.1 percent, to 16,025.53. The Nasdaq composite increased 6.23 points, or 0.2 percent, to 4,068.75.

Stocks were also supported by reports that US lawmakers were moving closer to reaching a longer-term budget deal, said Bill Stone, chief investment strategist at PNC Wealth Management Group.

Dick Durbin, the No. 2 Democrat in the Senate, said Sunday on ABC that budget negotiations are making progress and moving in the right direction.

The stock market stuttered in October after political wrangling over the budget caused a 16-day partial government shutdown that crimped economic growth and hurt consumer confidence.

A budget deal "could be viewed as positive, in the sense that it is putting to bed one more possible disruption," Stone said.

In other corporate news, American Airlines rose 65 cents, or 2.7 percent, to US$24.60 on the company's first day of trading after completing its merger with US Airways.

There were no major economic reports for investors to focus on.

The stock market has climbed to record levels this year as corporations have kept increasing their earnings and the Fed has kept up its US$85 billion-a-month bond purchasing program. The Fed's purchases have pushed up bond prices, lowered interest rates and encouraged investors to buy stocks.

Fed policymakers will meet next week, though few analysts are predicting that they will make changes to their bond-buying program. The meeting runs from Dec. 17 to Dec. 18.

Improvements in the labor market since September last year, when the Fed started its most recent round of stimulus, provided the most powerful argument for reducing bond purchases, St. Louis Fed President James Bullard said yesterday. Bullard, a voting member of the Fed's policy committee, was speaking in St. Louis.

In government bond trading, the yield on the 10-year Treasury note fell to 2.85 percent from 2.86 percent Friday.

In commodities trading, the price of oil fell 31 cents, or 0.3 percent, to US$97.34 a barrel. Gold rose US$5.20, or 0.4 percent, to US$1,234.20 an ounce.

Among other stocks making big moves:

— Twitter climbed US$4.19, or 9.3 percent, to US$49.14, its highest close since going public last month. The company said last week that it was developing its targeted ads based on user's web browsing history.

— Edwards Lifesciences slipped US$3.56, or 5.4 percent, to US$62.73 after the Wall Street Journal reported that the company forecast lower sales of its Sapien heart valves.

— McDonald's fell US$1.08, or 1.1 percent, to US$95.72 after the company said a key sales figure fell last month. Sales at US restaurants open at least a year fell 0.8 percent.

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