Dow, S&P 500 close at new record highs

3:23 PM, May 14, 2013   |    comments
(Photo: Richard Drew, AP)
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(USA TODAY) -- Stocks moved back into record territory Tuesday as the Dow Jones industrial average and the Standard & Poor's 500 index closed at new record highs.

The S&P 500 jumped 1.0% to 1,650, according to preliminary calculations. The Dow gained 0.8% to 15,215 and the tech-laden Nasdaq composite index rose 0.7% to 3,463.

Gains were led by financial companies as banks and insurers rose 1.4%, the biggest gain among the 10 industry groups in the S&P 500.

Bank of America shares rose to their highest level in more than two years, jumping 2.9%. JPMorgan Chase was up 1.2%.

For stock investors, the economy is "not too hot, not too cold," says Michael Sheldon, chief market strategist at RDM Financial. The economy is weak enough that the Fed will continue with its $85 billion-a-month economic stimulus program, but strong enough for companies to generate healthy earnings.

Optimism among small business owners also helped push stocks higher. Small business owners were slightly more optimistic in April, according to a survey released Tuesday by the National Federation of Independent Business. That helped push the Russell 2000, an index of small-company stocks, up 1.3%.

The price of oil slid by nearly $1 a barrel Tuesday as the International Energy Agency raised its forecast for U.S. oil production while cutting its prediction for global crude demand. Benchmark oil for June delivery dropped 96 cents to close at $94.21 a barrel on the New York Mercantile Exchange. Oil has declined $2.41 a barrel over the last four trading sessions.

Gold fell $9.80, or 0.7%, to $1,424.50. In government bond trading, the yield on the 10-year Treasury note rose to 1.95%.

In Asia, Japan's Nikkei 225 index fell 0.16% to 14,758.42. South Korea's Kospi added 0.2% to 1,948.70.

Shares of electric-car maker Tesla reversed course and were down 3.9% Tuesday, halting a dizzying ascent after the company reported its first quarterly profit on May 8.

And the stock price of Nokia was up 5.5%, after rival Blackberry unveiled a slimmer, cheaper version of its namesake product.

Stocks had a lackluster start to the week Monday. The Dow fell 0.2% to close Monday at 15,091.68. The S&P 500 was little changed at 1,633.77. The Nasdaq rose less than 0.1% to 3,438.79.

But the Dow and the S&P are both up about 15% for the year. Record company earnings, optimism that the economy is improving and economic stimulus from the Federal Reserve are bolstering demand for stocks.

Contributing: USA TODAY's Kim Hjelmgaard; The Associated Press

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