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S&P 500 Finishes Above 2,000

August 27, 2014 | About:

The S&P 500 traded above 2,000 in intra-day trading on Monday and closed above 2,000 for the first time in history on Tuesday. The S&P 500 finished the day at 2,000.02. Recovering from a slump in July and August, markets have regained strength to resume year-to-date progress. For the week, the S&P 500 is up 0.59%, and the Dow Jones Industrial Average is up 0.64%. Year-to-date, the S&P 500 is up 8.21%, and the Dow Jones Industrial Average is up 3.20%.

Some recent signs of further economic strengthening appear to be supporting the U.S. economy’s growth. The Advance Durable Goods report from the Commerce Department was released Tuesday, two days before the release of the preliminary second estimate of second quarter GDP on Thursday. In July, new orders for durable goods increased 22.6%. Economists had estimated the number would fall around 5.1% but within a range of -1% to 24.5%. The better-than-expected result was attributed to a surge in aircraft orders. The strengthening in durable goods orders could be a good sign for the economy, leading to further strengthened second-quarter GDP numbers. The Advance GDP report for the second quarter showed GDP of 4% on a seasonally adjusted annual rate basis compared to -2.1% in the first quarter.

The chief economist from Freddie Mac, Charles Nothaft, reinforced a market strengthening position in his note Monday, 4 Signs the Economy is Gradually Returning to Normal. He cited the improvement in the labor market as key to the economy’s progress. According to Nothaft, further labor market strengthening would help the housing market. Freddie Mac also sees continued strengthening in GDP. It reports expected GDP growth of around 3.0% for the remainder of 2014, increasing the estimate to 3.3% in 2015.

Improving labor markets, strengthened GDP growth and continued improvements in the housing market have helped the stock market. An upwardly revised or strengthened GDP report on Thursday could add to the rally. S&P 500 stocks leading in today’s trading included Cimarex (NYSE:XEC), Affiliated Managers Group (NYSE:AMG), Intuitive Surgical Inc. (NASDAQ:ISRG), Regeneron (NASDAQ:REGN) and F5 Networks (NASDAQ:FFIV).

About the author:

Julie Young is a financial journalist with comprehensive experience in the financial services industry. She primarily writes about financial market news and economic trends. Julie holds a Master of Science degree in finance from Boston College and a Bachelor of Science degree in finance from the University of Arkansas.

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