The S&P 500 Closed At A Five Year High Yesterday
The S&P 500 finished up 7.10 points at 1,466.47, its highest close since December 2007, AP reported.
The index began its descent from a record close of 1,565.15 in October 2007, as the early signs of the financial crisis began to emerge. The index bottomed out in March 2009 at 676.53 before staging a recovery that has seen it more than double in value and move to within 99 points of its all-time peak.
The Dow Jones Industrial Average finished 43.85 points, or 0.3pc, higher at 13,435.21. It gained 3.8pc for the week, its biggest weekly advance since June. The Nasdaq closed up 1.09 points at 3,101.66.
Stocks have surged this week after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the "fiscal cliff". The law passed late Tuesday night averted that outcome, which could have pushed the economy back into recession.
The Labor Department said US employers added 155,000 jobs in December, showing that hiring held up during the tense fiscal negotiations in Washington. It also said hiring was stronger in November than first thought. The unemployment rate held steady at 7.8pc.
The jobs report failed to give stocks more of a boost because the number of jobs was exactly in line with analysts' forecasts, said JJ Kinahan, chief derivatives trader for TD Ameritrade.
"The jobs report couldn't have been more in line," Kinahan said. "The market had more to lose than to gain from it."
Among stocks making big moves, Eli Lilly jumped $1.84, or 3.7pc, to $51.56 after saying that its earnings will grow more than Wall Street expects, even though the drugmaker will lose US patent protection for two more product types this year.
Walgreen, the largest US drugstore chain, fell 61 cents, or 1.6pc, to $37.18 after the company said that a measure of revenue fell more than analysts had expected in December, even as prescription counts continued to recover.
Stocks may also be benefiting as investors adjust their portfolios to favor stocks over bonds, said TD Ameritrade's Kinahan. A multi-year rally in bonds has pushed up prices for the securities and reduced the yield that they offer, in many cases to levels below company dividends.
Goldman Sachs reaffirmed its view that stocks "can be an attractive source of income", and warned that there is a risk that bonds may fall. In a note to clients, the investment bank said that an index of AAA rated corporate bonds offers a yield of just 1.6pc, less than the S&P 500's dividend yield of 2.2pc.
The 10-year Treasury note fell, pushing its yield higher. The yield on the 10-year note fell two basis points to 1.91pc. The note's yield has now climbed 52 basis points since falling to its lowest in at least 20 years in July.
