Historic: S&P 500 trades above 2,000 points for first time
New York • The Standard & Poor's 500 index traded above the 2,000-point mark for the first time on Monday, the latest milestone in a five-year rally for U.S. stocks. Investors were encouraged by some high-profile corporate deal news, which overshadowed sluggish sales of new homes. Burger King and biotech company InterMune were among the biggest risers.
RECORD TERRITORY: The S&P 500, a widely followed barometer of the U.S. stock market, crossed above 2,000 in the first hour of trading Monday, then moved slightly lower. The S&P 500 closed above 1,000 points for the first time in February 1998.
"Closing above that level is going to be the big test," said JJ Kinahan, chief strategist at TD Ameritrade. "The S&P 500 overall is a sea of green, which is a great thing to see for those who are bullish."
KEEPING SCORE: The S&P 500 was up 10 points, or 0.5 percent, to 1,998 as of 3:19 p.m. Eastern. The Dow Jones industrial average added 86 points, or 0.5 percent, to 17,087. The Nasdaq composite rose 18 points, or 0.4 percent, to 4,556.
RUN, BULL, RUN: The stock market is enjoying a late summer revival, after dipping earlier this month on concerns about rising geopolitical tensions in Russia and the Middle East. Investors have put those concerns aside for now, and are focusing on the improving outlook for the U.S. economy the prospect of rising corporate earnings. Stocks, supported by the Federal Reserve's easy-money policies, have been on a bull run for more than five years after the market bottomed out during the Great Recession in March, 2009.
"Unless the story changes, the stock market is going to get pushed higher by the lack of potentially good returns elsewhere," said David Kelley, JPMorgan Funds' chief global strategist.
HOUSING STUMBLE: The Commerce Department said sales of new U.S. homes slid 2.4 percent last month to a seasonally adjusted annual rate of 412,000. That's down from an upwardly revised June rate. New home sales have struggled to gain traction this year, held back by modest wage growth, a bump in mortgage rates and rising home prices. Several homebuilder stocks turned lower after the report came out at 10:00 a.m. Eastern time, led by New Home Company with a decline of 45 cents, or 3.1 percent, to $14.01.
DEAL BOOST: Shares in InterMune vaulted 35.5 percent following news that the California biotech company agreed to sell itself to Swiss pharmaceutical company Roche for $8.3 billion. The deal was announced Sunday. Roche added $19.10 to $72.91.
UNDER PRESSURE: A big shareholder in Ann, the parent company of Ann Taylor and Loft clothing chains, is putting public pressure on management to explore selling the company. The campaign drove Ann shares up $2.25, or 6 percent, to $39.76.
DOUGHNUT KING? Burger King rose $5.49, or 20.1 percent, to $32.57 on news the fast-food chain is in talks to acquire doughnut chain Tim Hortons and create a new holding company headquartered in Canada, a move that could shave its tax bill.
HEFTY SECOND COURSE: Online restaurant delivery service GrubHub disclosed in a regulatory filing that it may sell 10 million shares after last year's big initial public offering. Traders didn't find the disclosure appetizing, sending the stock down $3.73, or 8.7 percent, to $39.07.
SECTOR WATCH: The 10 sectors in the S&P 500 rose, with financials leading the pack. Among individual stocks, Newfield Exploration rose the most, adding $1.67, or 3.9 percent, to $44.07. Peabody Energy fell the most, losing 42 cents, or about 2.6 percent, to $15.70.
BONDS AND COMMODITIES: Bond prices were little changed. The yield on the 10-year Treasury note slipped to 2.39 percent from 2.40 percent late Friday. Benchmark U.S. crude for October delivery fell 30 cents to $93.35 a barrel in New York. In metals trading, gold fell $1.30 to $1,278.90 an ounce, silver fell three cents to $19.36 an ounce and copper edged up a penny to $3.22 a pound.
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AP Business Writers Steve Rothwell contributed from New York and Youkyoung Lee contributed from Seoul, South Korea.