Wall Street Rallies in Best Day This Year as Banks Fly
The stock market posted its best day this year, with Tuesday’s late spark coming from JPMorgan Chase & Co after the bank announced it will raise its dividend.
Stocks gained throughout the session, helped by stronger-than-expected retail sales and benign comments from the Federal Reserve, which said recent strains on financial markets were easing.
The S&P 500 closed at a level not seen since June 2008 in a sign that the market foresees more strength in the U.S. economy in coming months. The index, already up 11 percent this year, has risen for five straight days and appears set for more gains.
Banks led the way with a powerful kick into the close. JP Morgan Chase & Co (JPM.N) surged 7 percent to $43.39 and was the Dow’s top gainer after announcing it will raise its dividend and unveiling a $15 billion stock-buyback program. Bank of America Corp (BAC.N) gained 6.3 percent to $8.49 while an S&P index of financial stocks .GSPF climbed 3.9 percent.
“That kind of put us into fourth gear here,” said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston. “The financials have been such a drag on the whole market for the last couple of years.”
The Nasdaq Composite hit an intraday high at 3,039.89, its highest mark since November 2000.
Tuesday marked the first time that the Nasdaq closed above 3,000 and the Dow ended above 13,000 on the same day.
The S&P 500’s move above 1,390 puts the broad-market index in position to surpass 1,400, which could bring out more buyers. The S&P 500 index reached 1,396.13, its highest intraday level since June 2008.
“The momentum we’re seeing is likely to continue,” said David Joy, chief market strategist at Ameriprise Financial in Boston.
Joy, who helps oversee $571 billion in assets under management, added that despite the gains, he didn’t see stocks as overpriced.
“You need to be overweight stocks right now,” he said. “In the absence of bad news, I see no need for us to have any kind of serious correction.”