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S&P 500 at new record on solid earnings

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The S&P 500 has closed at a new record following a batch of mostly solid economic and corporate earnings reports, and a modestly upbeat Federal Reserve report.

The S&P 500 jumped 9.50 (0.52 per cent) to 1,848.38, edging past the prior record of 1,848.36.

The Dow Jones Industrial Average gained 108.08 (0.66 per cent) to 16,481.94, while the tech-rich Nasdaq Composite Index increased 31.87 (0.76 per cent) to 4,214.88.

Peter Cardillo, chief market economist at Rockwell Global Capital, said the Federal Reserve’s “Beige Book” survey pointed to stronger economic conditions throughout the US.

Cardillo also cited a report from the New York Federal Reserve bank that showed rising manufacturing activity in New York state. The World Bank also upgraded its 2014 economic growth forecast.

Stocks are rising due to “an improving economy, good prospects for earnings season and a theme that there is still no place to put your money” outside of equities, Cardillo said.

Bank of America rose 2.3 per cent after reporting an eight-fold increase in quarterly earnings as set-asides for reserves fell due to improved credit quality. The US banking giant earned 29 cents per share, up 3 cents from analyst forecasts.

Other leading banks also rallied on better sentiment towards the sector, including Dow component JPMorgan Chase (+3.0 per cent), Wells Fargo (+1.8 per cent) and Citigroup (+1.9 per cent).

General Motors fell 1.6 per cent after forecasting “modest” global industry growth in 2014 and projecting a big rise in restructuring costs. The US auto giant announced late Tuesday that it would pay its first corporate dividend since the 2008 government rescue on March 28.

Apple rose 2.0 per cent as it prepared to market iPhones to more Chinese consumers following a major deal with China Mobile. Chief executive Tim Cook told news outlets the launch was a “watershed moment” for the company.

Separately, Apple agreed to refund at least $32.5 million to US customers for children’s purchases from its online App Store without parental consent in a settlement with the Federal Trade Commission.

Bond prices fell slightly. The yield on the 10-year US Treasury rose to 2.88 per cent from 2.87 per cent, while the 30-year rose to 3.81 per cent from 3.80 per cent. Bond prices and yields move inversely.