S&P 500 and Dow Jones Reach New Records

On Wall Street on Friday, the S&P 500 and Dow Jones indices reached new all-time highs, with bank stocks being the biggest winners as Wells Fargo and JPMorgan reported better-than-expected quarterly results.

The Dow Jones rose by 3 points, or 0.02 percent, to 15,464 points, while the S&P 500 strengthened by 0.31 percent to 1,680 points, and the Nasdaq index increased by 0.61 percent to 3,600 points.

The rise in the indices was primarily attributed to the increase in bank stock prices, following better-than-expected second-quarter results from Wells Fargo and JPMorgan.

The S&P financial sector index was the biggest winner yesterday, rising by 0.8 percent. Meanwhile, the stock prices of Citigroup, Wells Fargo, and Bank of America increased between 1.5 and 2 percent. JPMorgan’s stock, however, fell by 0.3 percent after spending most of the trading session up about 1 percent.

Among the biggest losers was Boeing’s stock, following news that a fire broke out in the Dreamliner aircraft of that manufacturer at London’s Heathrow Airport.

As a result, the stock prices of Boeing’s suppliers, such as Honeywell International and Spirit Aerosystems, also declined.

The stock price of United Parcel Service fell sharply by 5.8 percent after the postal company warned that its quarterly results would be weaker than previously estimated.

In recent days, stock prices have risen sharply, thanks to the announcement by Fed Chairman Ben Bernanke that the central bank will continue its accommodative monetary policy for some time until the labor market significantly recovers. This has removed a significant uncertainty from the market, and the further direction of stock prices will largely depend on the second-quarter results of American companies.

In a Thomson Reuters survey, analysts estimate that the earnings of companies in the S&P 500 index rose by 2.8 percent in the second quarter compared to the same period last year, while their revenues could increase by 1.5 percent.

Due to such a low bar, companies will find it easier to exceed estimates, which opens up room for further stock price growth, analysts say.

Throughout this week, the Dow Jones rose by 2.2 percent, while the S&P 500 jumped by 3 percent, and the Nasdaq index by 3.5 percent.

European markets traded cautiously yesterday. The London FTSE index strengthened by 0.02 percent to 6,544 points, while the Frankfurt DAX rose by 0.66 percent to 8,212 points. The Paris CAC, on the other hand, weakened by 0.36 percent to 3,855 points.