Market Wrap: More Records Fall Thanks to Good Economic News

Andrew Burton/Getty Images By MATTHEW CRAFT

NEW YORK -- More encouraging economic news and friendly signals from the Federal Reserve cheered investors on Thursday, as the stock market climbed to another record high.

The gains came a day after the Fed made clear that i! t's in no hurry to raise a key bank lending rate, easing a major concern for the stock market.

Eight of 10 industry groups in the Standard & Poor's 500 index rose, led by financial stocks.

"The question isn't 'Why are we up today?'" said Dan Veru, chief investment officer at Palisade Capital Partners in New York. "It's 'Why aren't we up a lot more?' What you're seeing is the U.S. economy growing at a modest pace, not too hot and not too cold."

Veru said it's an environment that allows the Fed to stick to a policy that coaxes businesses to borrow and spend and could fuel further gains for stocks.

The S&P 500 and Dow Jones industrial average closed at all-time highs. The S&P 500 index (^GPSC) gained 9.79 points, or 0.5 percent, to 2,011.36. The Dow (^DJI) surged 109.14 points, or 0.6 percent, to 17,265.99. The Nasdaq composite (^IXIC) climbed 31.24 points, or 0.7 percent, to 4,593.43.

The S&P Financials sector rose 1.1 percent. Bank profits could! rise if short-term rates stay low while the rates they charge! on longer-term loans creep higher.

The day began with good news about the economy. Fewer Americans filed first-time claims for unemployment benefits last week, according to the Labor Department. Weekly applications fell to 280,000, well below economists' forecasts. The four-week average, a less-volatile measure, also dropped.

Major markets in Europe headed higher as voters in Scotland decided whether to break from the United Kingdom. Germany's DAX advanced 1.4 percent, and France's CAC 40 gained 0.8 percent. Britain's FTSE 100 added 0.6 percent.

Scotland opened polling stations on Thursday for a referendum on whether the country should leave the United Kingdom of Great Britain and Northern Ireland to become an independent state. Opinion polls have suggested the "Yes" campaign favoring independence is neck and neck with the "No" campaign that wants Scotland to stay in the U.K.

"A 'yes' vote is likely to weigh heavil! y on the sterling and equities," said IG strategist Stan Shamu in a commentary. "A 'no' vote should result in a relief rally and is likely to be positive for the sterling and equities."

The pound was trading at a two-year high against the euro at €1.27, and holding steady against the dollar at $1.64.

On Wednesday in the U.S., the Fed maintained its stance of keeping short-term interest rates near zero for a "considerable time." Investors had speculated that the Fed might hint at an earlier start for rate hikes.

Among companies making big moves on Thursday, Rite Aid (RAD) plunged 19 percent after it cut its profit forecasts for the full year, laying part of the blame on higher costs for generic drugs. The drugstore chain still expects sales of $26 billion this year. Rite Aid's stock fell $1.23 to $5.41.

ConAgra (CAG) said its quarterly profits nearly tripled, sending its stock up $1.47, or 5 percent, to $33.48. Sales for the company behind Chef Boya! rdee canned pasta and Hebrew National hot dogs were flat, but other cos! ts fell.

Alibaba Group is expected to wrap up its mammoth initial public offering later Thursday, then make its debut on the New York Stock Exchange on Friday under the symbol "BABA." The Chinese e-commerce company could raise as much as $21.8 billion from institutional investors, making it the largest IPO on record in the U.S.

Elsewhere, Hong Kong's Hang Seng finished 0.9 percent lower and Japan's Nikkei 225 gained 1 percent as the yen traded at a six-year low against the dollar. Markets in mainland China, India and Southeast Asia also rose.

In commodity trading, prices for precious and industrial metals fell broadly. Gold dropped $9 to settle at $1,226.90 an ounce, and silver sank 22 cents to $18.52. Copper dropped 5 cents to $3.09.

The price of oil fell on expectations of a quick return of Libyan production and continuing signals of lower global demand. Benchmark U.S. crude fell $1.35 to close at $93.07 a barrel in New York. Brent crude, a benchma! rk for international oils used by many U.S. refineries, fell $1.27 to close at $97.70 in London.

In other energy trading, wholesale gasoline fell 0.8 cent to close at $2.561 a gallon. Heating oil fell 3.3 cents to close at $2.712 a gallon. Natural gas fell 10.3 cents to close at $3.910 per 1,000 cubic feet

AP Business Writer Youkyung Lee contributed from Seoul, South Korea.

What to Watch Friday:

• The Conference Board releases leading indicators for August at 10 a.m. Eastern time.

• For many employers, open enrollment season for some benefits happens in October. This usually sneaks up on some people, who scramble to decipher benefits and make elections last minute. Although you won't be able to see the options until the enrollment period opens, take time now to review your benefits. Are you taking advantage of any 401(k) matches? Are your fully funding your Flexible Spending Account? What about employer offered life and disability insurance? (A fun infographic from the Council for Disability Awareness shows your risks). Maximize your benefits and don't leave any money on the table.
  ​1. Make the right choices at open enrollment
• Back-to-school time can be expensive if you're not prepared. Money is spent on clothes, books, supplies and technology -- and that's before the doors to the classroom have even opened. Before hitting the stores, do these two things:

  • Conduct an online search for "coupon code" along with the name of any store you'll be shopping at. Typically you can find some great online deals.
  • Get a list from you class or teacher of specific type of notebook, calculator, etc. required. If you can't get child's "must haves" from ahead of time, buy just the bare minimums until school starts and the list is available.
  2. Spend wisely on back-to-school items
• It's hard to think about the holidays when we're just making it through summer, but now is the time to build up a financial cushion. Set yourself up with an automatic transfer to a separate savings account and participate in the Holiday Fund Money Challenge to build up a savings of $450. How much do you need for the gifts, travel, parties, entertaining, food and other holiday activities you anticipate? Planning will help to ease the stress that comes around the holidays.
  ​3. Plan for the end-of-year holidays
• In lieu of scrambling at the end of the year to make contributions to retirement accounts by Dec. 31, double-check your contributions now and determine if there's room in your cash flow to allow for an increase to possibly max out by year end.
  ​4. Maximize your retirement funding
• Summer is a typically a time of transitions. There are weddings, moves to new homes, possibly a new family addition and more. If summer is the time when these events take place, fall should be the time to take stock of how they're panning out. If you're recently married and haven't already, now is the time to have the money talk with your spouse and make decisions about spending plans, merging (or not merging) accounts, beneficiary updates and more. If you've moved, check out how the new location has affected your cost of living spending in terms of activities, gas costs, groceries and more. Ultimately with any transition, you need to review your spending plan and determine what areas (if any) need to be adjusted.
  5. Consider your transitions
• If you're lucky enough to live in one of the states that actually experiences seasons, fall is the time to prep for energy savings by caulking and weatherstripping doors and windows, turning your thermostat back for a fixed period each day and insulating your attic, basement or outside walls.
  6. Weatherproof your home
• More from DailyFinance:

Source : http://www.dailyfinance.com/2014/09/18/market-wrap-more-records-fall-thanks-to-good-economic-news/