S&P Strongest in the Last Five Years

On Wall Street on Friday, the S&P 500 index broke above the psychologically important level of 1,500 points for the first time in over five years, thanks to better-than-expected quarterly business results from companies.

The Dow Jones index rose by 70 points, or 0.51 percent, to 13,895 points, the highest level since October 2007. The S&P 500 strengthened by 0.54 percent to 1,502 points, the highest level since December 2007, while the Nasdaq index increased by 0.62 percent to 3,149 points.

The S&P 500 index has risen for eight consecutive days, marking its longest positive streak in eight years, and is now only 4.1 percent away from its record level of 1,565 points, reached in October 2007.

The excellent start to the year is attributed to an agreement in Washington to postpone discussions on the allowed level of government borrowing, signs of strengthening in the world’s largest economies, and solid quarterly business results from companies.

Yesterday, among the biggest gainers, with a price increase of 4 percent, was Procter & Gamble’s stock, as the household products manufacturer reported better-than-expected business results in the fourth quarter and raised its business forecasts for this year.

For the same reason, the stock price of the Starbucks coffee chain jumped more than 4 percent, while oil company Halliburton rose more than 5 percent. Investors were also encouraged by good macroeconomic data in the U.S. Although new home sales fell in December, they reached their highest levels in the entire previous year since 2009.

– Macroeconomic data in the U.S. is gradually improving. The situation is slowly getting better – says Quincy Krosby, an analyst at Prudential Financial. Positive market influence also came from the fact that in Germany, the business sentiment index rose for the third consecutive month in January, reaching its highest level in six months. European banks reported that they would return a larger amount of loans to the European Central Bank than previously estimated, which they took during the crisis.

– Good news from the credit market has supported investors’ appetite for riskier investments – says Krosby. Among the losers, Apple’s stock has again come under pressure due to weaker-than-expected quarterly business results. Its price fell another 2.4 percent yesterday, meaning Apple is no longer the largest American company by market capitalization.

Apple’s value has fallen to $413 billion, placing it behind oil giant Exxon Mobil.

Throughout this week, the Dow Jones index has risen by 1.8 percent, while the S&P 500 strengthened by 1.1 percent and the Nasdaq index by 0.5 percent. This marks the fourth consecutive week of gains for these indices.

European stock prices also rose yesterday. The London FTSE index increased by 0.31 percent to 6,284 points, while the Frankfurt DAX rose by 1.42 percent to 7,857 points, and the Paris CAC by 0.69 percent to 3,778 points.