S&P 500, Dow Jones extend record highs
Stocks on the American exchanges extended their rally, with the Standard & Poor’s 500 Index registering its seventh consecutive weekly gain.
The S&P 500 was led higher by burgeoning healthcare stocks, which jumped 1.2 percent. Drug-makers Biogen Idec (NASDAQ:BIIB) and Gilead Sciences (NASDAQ:GILD) advanced 14.15 percent and 3.69 percent, respectively. Biogen Idec registered its biggest gain in over two years after the biotechnology company’s multiple sclerosis drug Tecfidera won added protection against generic copies in Europe.
The S&P 500 gained almost 9 points to 1,804.76, extending its record high. The Dow Jones Industrial Average did the same after the benchmark index gained 54.78 points to 16,064.77. In total, 23 of the Dow’s 30 members reported gains, led by Wal-Mart Stores (NYSE:WMT) , The Travelers Cos (NYSE:TRV) and The Boeing Company (NYSE:BA) .
“I don’t see any reason why the market shouldn’t go up,” said Karyn Cavanaugh of ING US Investment Management Inc. “There’s not really any bad news,” Cavanaugh added.
Investors have been mildly concerned about how fast stocks have risen, leading to speculation about a market bubble. Billionaire hedge-fund manager David Tepper has reassured investors the current market is not a bubble.
Perhaps the more important question is whether the market’s meteoric rise in 2013 is more attributable to quantitative easing than it is to improving fundamentals. The so-called stimulus-in-disguise argument has been put forward by several analysts who are concerned with the Fed’s expanding balance sheet, which is approaching $4 trillion. The Federal Reserve is expected to continue easing at its current pace until the spring, according to a median estimate of economists surveyed by Bloomberg News. Incoming Fed Chair Janet Yellen won’t rush to taper record stimulus despite growing pressures to do the same. Yellen replaces current Fed Chair Ben Bernanke on February 1, 2014.
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