S&P 500 tops highest closing level in 4 years on Europe optimism

New York: US stocks advanced, sending the Standard & Poor’s 500 Index past the highest closing level in four years, amid speculation euro-area leaders will make progress in resolving the region’s debt crisis.

The S&P 500 gained 0.2 per cent to 1,421.10 at 9:54am in New York, surpassing the four-year closing high of 1,419.04 reached on April 2. The Dow Jones Industrial Average advanced 7.39 points, or 0.1 per cent, to 13,279.03, topping the highest closing level since 2007. Trading in S&P 500 companies was 5.2 per cent below the 30-day average at this time of day.

“Markets are still consolidating and reacting to the fact that European markets were up overnight,” Frederic Dickson, who helps oversee about $32 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said in a phone interview. “Spanish debt yields fell a little ahead of the meetings in Europe coming up.”

The S&P 500 has climbed 11 per cent since June 1, as economic reports beat forecasts and amid investor optimism that global central banks will take actions to stimulate growth. Trading volume and volatility have dropped this month as vacationing traders await policy clues from the Federal Reserve’s summit at the end of the month and a European Central Bank meeting in September.

On Wednesday, the Fed will publish minutes of its two-day meeting that ended on August 1. The central bank, which has pledged to keep its benchmark rate near zero through 2014, refrained from adding to the $2.3 trillion in asset purchases it has already made to support the economy. Its next gathering is on Sept. 12-13.

The euro rallied 1 per cent to $1.2464, while the dollar slipped 0.1 per cent to 79.33 yen.

“The dollar is weaker versus the euro ahead of the key meetings this week that may provide clarity on both the immediate outlook for Greece and the outlook in regard to the ECB’s plan to buy sovereign bonds,” said Derek Halpenny of Bank of Tokyo Mitsubishi. “That optimism is persisting today.”

Brent crude oil rose $1.33 at $115.03 a barrel, and has jumped from below $90 at the end of June, propelled by maintenance in the North Sea and increased fear of military conflict with Iran.