Economy buoys S&P 500 to new high
NEW YORK - More promising signs that the economy is strengthening after its winter slowdown pushed stocks higher Tuesday.
The Standard & Poor's 500 index rose for the fourth straight day and ended at another all-time high. It closed above 1,900 for the first time on Friday. Small-company stocks and other riskier parts of the market, like Internet and biotechnology companies, also gained after being beaten down over the last few months.
The government reported that orders to U.S. factories for long-lasting manufactured goods rose unexpectedly in April, powered by a surge in demand for military aircraft. Also, the Conference Board's consumer confidence index rose in May to the second-highest level since January 2008, just after the start of the Great Recession.
The Standard & Poor's 500 index rose 11.38 points, or 0.60 percent, to 1,911.91. The stock market was closed Monday for Memorial Day.
The Dow Jones industrial average gained 69.23 points, or 0.42 percent, to 16,675.50. The Nasdaq composite climbed 51.26 points, or 1.22 percent, to 4,237.07.
Nine of the 10 sectors that make up the S&P 500 rose, led by financial and industrial companies.
Hillshire Brands, the maker of Jimmy Dean breakfast sausage and other products, was among the biggest gainers Tuesday. The stock jumped $8.17, or 22.1 percent, to $45.19 after poultry producer Pilgrim's Pride offered to acquire the company in a deal worth about $5.6 billion. Pilgrim's Pride said the deal was better than Hillshire's plan, announced earlier this month, to buy Pinnacle Foods for $4.23 billion. Pinnacle's stock fell $1.79, or 5.4 percent, to $31.48.
Despite the positive economic news, bond prices rose. Typically, bond prices fall and their yields rise when economic data improves as traders anticipate that interest rates will rise in the future.
The yield on the 10-year Treasury note fell to 2.51 percent from 2.53 percent on Friday. The yield on the note is trading close to its lowest in 10 months. It started the year at 3 percent.
While the stock market has made modest gains this year, bonds have surged, contrary to the expectations of many analysts, who had forecast that bond prices would drop as the economy strengthened.
Among other stocks, Bank of America rose 50 cents, or 3.4 percent, to $15.22 after the lender said it's resubmitting a review of its operations to the Federal Reserve a month after discovering errors in its initial report. That forced the bank to suspend a dividend increase and stock buyback.