US stocks rise to record highs

U.S. stock indexes advanced, sending the Standard & Poor’s 500 Index above its record closing level, as Federal Reserve Chairman Ben S. Bernanke supported sustaining monetary stimulus. All 10 industries included in the S&P 500 gained, with technology and raw-material shares posting the biggest gains.

The S&P benchmark added 1.3% to 1,675.02 which is an all time record high. The Dow Jones Industrial Average jumped more than 133.08 points, or 0.9%.

“The story in stocks for this year is about confidence replacing uncertainty and anxiety,” Hank Smith, is chief investment officer at Radnor, Pennsylvania-based Haverford Trust Co., said by telephone. “It’s really more about an improvement in sentiment. That’s being a big driver for equity returns and we are still a long ways away from worrying about there being too much optimism or exuberance.” he added for Bloomberg.

Bernanke explained yesterday that monetary policy would be as accommodative as needed for the world’s largest economy. The Fed chairman spoke just three hours after the central bank released minutes of the June 18-19 gathering showing that about half of the 19 participants in the Federal Open Market Committee wanted to halt $85 billion in monthly bond purchases by year end.
At the same time, the minutes showed many Fed officials wanted to see more signs of sustainable employment improvements before reducing the quantitative easing.

Investors focused on earnings results this week. Profit at companies listed on the S&P 500 was up 1.8% last quarter, down from a projection of 8.7% six months ago, according to analyst estimates compiled by Bloomberg. Lower expectations helped more than two-thirds of the companies in the benchmark measure exceed forecasts by an average of 5.1% for the first three months of the year, Bloomberg data show.

All 10 industry groups in the S&P 500 gained yesterday, with technology and raw-material shares reporting the biggest advance. Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. led gold producers higher as the precious metal’s price soared. Gold jumped after jobless claims report proved weaker than expected and the dollar declined. Advanced Micro Devices Inc. rose 10% as analysts recommended that investors buy the shares. An S&P gauge of homebuilders added 6.2%t as all 11 members advanced.