US stocks surged higher on Tuesday as favourable sentiment towards equities more than compensated for a mixed bag of economic indicators.
The Dow set a new record while the S&P 500 narrowly missed, coming within 2 points of its October 2007 all-time high.
The Dow Jones Industrial Average jumped 111.90 (0.77 per cent) to 14,559.65, breaking the previous mark of March 14.
The S&P, which measures a broad base of equities in all major economic sectors, shot up 12.08 (0.78 per cent) to 1,563.77, just short of its all-time closing high of 1,565.15.
The tech-heavy Nasdaq Composite Index rose 17.18 (0.53 per cent) to 3,252.48.
The gains came after a mixed array of economic data. US durable goods orders for February rose solidly on mainly aircraft orders, and the S&P/Case-Shiller Home Price index showed prices rose 8.1 per cent for 20 leading cities for the 12 months to January, the highest year-over-year increase since mid-2006.
But the Conference Board index of consumer confidence dropped 8.3 points to 59.7, weakened by concerns over federal budget cuts.
The rise in stocks to fresh record levels is like a “self-fulfilling prophesy,” said Sam Stovall, chief investment strategist for Standard & Poor’s.
“There are an awful lot of people on the sidelines who would like to have more exposure to equities,” Stovall said.
On the Dow, Hewlett-Packard gained 2.3 per cent, and Boeing added 2.1 per cent after announcing that the first test flight of its troubled 787 aircraft went according to plan.
Boeing is hoping a second flight soon will get its battery fix approved so the grounded aircraft can return to service.
Chipmaker Intel gained 2.9 per cent on reports that it is making progress in talks with entertainment companies to provide content for an online pay-TV service.
Berkshire Hathaway gained 1.4 per cent following a deal on its Goldman Sachs warrants that will leave it one of the investment bank’s 10 biggest shareholders without having to pay anything.
The Children’s Place Retail Stores, which sells children’s clothing, fell 3.2 per cent after slashing its sales forecast due to “unfavourable weather and weak macro-economic” conditions that limited consumer spending.
Ziopharm Oncology, a biopharmaceutical company focused on new cancer therapies, sank 64.5 per cent after its most advanced product fell short of expectations in a trial.
Bond prices rose. The yield on the 10-year Treasury fell to 1.91 per cent from 1.92 per cent late on Monday, while the 30-year dropped to 3.13 per cent from 3.14 per cent. Bond prices move inversely to yields.