Dow, S&P 500 end at record highs

Comment on this story
WallStreet1234 REUTERS The US bourse is set to open higher as European leaders get ready to meet.

New York - US stocks rose on Friday, driving the Dow and the S&P 500 to close at record highs as the shares of 330 companies hit 52-week highs on the New York Stock Exchange.

The S&P 500 scored its third record closing high in a row.

For the week, the three major US stock indexes rose 1 percent as investors brushed off geopolitical concerns about Iraq and focused on the Federal Reserve's comments indicating that it will keep interest rates low for a long period of time.

The benchmark S&P 500 has gained for six consecutive days, supporting a cautious view that a near-term correction may be inevitable.

“I haven't been concerned for weeks, but I'm becoming a bit concerned now with where the market is, especially with many indicators hitting levels that are contrary to the normal reading,” said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas.

The most notable indicators included the correlation of the CBOE Volatility Index, known as the VIX, with the S&P 500.

The VIX usually moves inversely to the S&P 500.

The fear gauge is near its lowest since February 2007 while the S&P 500 is at an all-time high.

For the VIX to be near the lowest level in more than seven years while the S&P 500 is at a record high is causing concern that the market may be too complacent.

“I'm expecting not a big correction like 10 percent or so, but a good 3 to 4 percent adjustment next week won't be a surprise,” Frederick said.

The VIX rose 2.2 percent to close at 10.85, still well below its long-term average of 20.

Volume was higher than usual as Friday marked a “quadruple witching” day - the expiration of stock options, index options, index futures and single-stock futures.

The Dow Jones industrial average rose 25.62 points or 0.15 percent, to 16,947.08.

The S&P 500 gained 3.39 points or 0.17 percent, to 1,962.87.

The Nasdaq Composite added 8.71 points or 0.20 percent, to 4,368.04.

For the week, the Dow rose 1 percent, the S&P 500 climbed 1.4 percent and the Nasdaq gained 1.3 percent.

Oracle Corp shares dropped 4 percent to $40.82 and ranked among the biggest drags on the S&P 500.

The stock's slide came a day after the software maker posted fiscal fourth-quarter results that disappointed investors looking for more progress against rivals selling web-based services.

But CarMax surged 16.5 percent to $52.75.

The stock was the S&P 500's best performer after the used-vehicle retailer reported first-quarter earnings that topped analysts' expectations.

RadioShack Corp was among the 18 stocks that hit a 52-week low on the New York Stock Exchange on Friday.

The stock hit a lifetime low, dropping into penny-stock territory for the first time on heavy volume.

The stock fell 10.4 percent to 92 cents.

Volume was heavy after RadioShack's stock fell under the threshold, with about 13 million shares exchanging hands, compared with its composite 25-day average of 3.9 million.

About 7.2 billion shares changed hands on US exchanges, well above the average of 5.5 billion for the month to date, according to data from BATS Global Markets. - Reuters

sign up

Comment Guidelines

  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

  5. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles. You are only required to verify your email address once to have full access to commenting on articles. For more information please read our comment guidelines