new York August 21, 2012, 19:28 IST
new York 08 21, 2012, 19:30 IST
Wall Street hit a four-year high on Tuesday as equity markets continue to grind steadily higher on hopes that central banks will act in the near future to stimulate their economies.
The S&P 500 has risen nearly 3 percent so far in August. Much of those gains have come on a few outsized days while other days have seen small incremental gains. Volumes have been light as investors wait for central banks' meetings next month where policymakers are expected to take action to ease Europe's debt crisis and boost the economy.
"I am looking for new highs in the major indexes," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "Overall there is no one major negative that's out there right now that people are scared of."
The perception of declining risks from the euro crisis has been a major factor behind equity gains. Yields at a Spanish short-term debt auction dived on Tuesday, while Europe's volatility index VSTOXX hit a one-month low, signaling a steady rise in investors' appetite for risk.
The S&P 500 passed this year's high of 1,422.38 set in April to make a four-year intraday high and taking the index back to May 2008.
The Dow Jones industrial average gained 14.52 points, or 0.11 percent, to 13,286.16. The Standard & Poor's 500 Index was up 3.94 points, or 0.28 percent, at 1,422.07 after earlier rising to 1422.98. The Nasdaq Composite Index added 13.79 points, or 0.45 percent, to 3,090.00.
The euro rallied to a seven-week high against the dollar on Tuesday bolstered by talk the European Central Bank will take action to ease Spanish and Italian borrowing costs.
Best Buy Co shares slumped 8.6 percent. The company cut its fiscal-year profit outlook on Tuesday, citing lower expectations for industrywide sales and uncertainty about key product introductions, and the consumer electronics retailer suspended its share buybacks for the year.
Signs that the U.S. labor market is performing better than previously thought have also helped stocks.
European stocks rose, keeping a four-week rally alive, as investors bet the European Central Bank will soon start buying Spanish and Italian bonds to help lower their borrowing costs. The FTSEurofirst 300 rose 0.2 percent.
Facebook Inc director Peter Thiel sold roughly $400 million worth of shares in the Internet social networking company last week, cashing out most of his stake. The sale comes as Facebook shares lost 50 percent of their value since its IPO earlier this year. The shares fell 2.6 percent to $19.46.
The chief executives of Apple Inc and Samsung Electronics Co Ltd <005930.KS> have talked but did not settle the high-stakes patent dispute between the two electronics companies, a Samsung attorney said in court on Monday.
Medtronic Inc reported higher quarterly earnings on Tuesday but fell just short of Wall Street expectations as sales in its key cardiac rhythm management unit showed continued weakness. The shares fell 0.9 percent to $41.05.
(Editing by Dave Zimmerman)