NEW YORK (Reuters) – The S & P 500, the benchmark on which investors tend to count as an indirect indicator of the US stock market, topped 3,000 for the first time on Wednesday.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, United States, July 1, 2019. REUTERS / Brendan McDermid
The index broke through the level just after the market opened, after comments from Federal Reserve Chairman Jerome Powell reassured traders of an imminent reduction in interest rates from the market. share of the central bank.
The S & P pulled back the mark during the session and rose 0.42% in mid-afternoon trading, near 2 992. But the mere fact of trading beyond the The 3,000 mark could be a watershed for food in a record-breaking market this year.
"If the 3,000 records reach unprecedented highs, more investors will be interested in the market," said David Mazza, product manager at Direxion Investments in New York.
"If this type of psychological effect brings investors back into the market, it could provide support that has not been there to continue this race," Mazza said.
The index, which includes US companies with significant market value, took less than five years to reach 1,000 points. The S & P closed above 2,000 for the first time on August 26, 2014.
On the other hand, the increase from 1,000 to 2,000 took more than 16 years – and included two recessions.
Of course, although equal in points, the jumps of 1,000 points were very different in percentage. The latest price of 3,000 represented a 50% gain, while the gain of 1,000 to 2,000 represented a doubling of the index.
Some of the most prominent names in the market are also among the best performers, while the S & P climbed its last mountain at 1,000 points. Amazon.com shares rose about 490% during this period, while Netflix's share price rose 450%.
The milestone of the S & P 500 "highlights the strength of the economy, the strength of companies and their growth," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
"This is a testament to the growth of technology and how companies in all sectors are using technology to reduce costs and improve products," said Ghriskey.
The technology and consumer discretionary sectors also propelled the S & P 500 in 2019, the index having climbed more than 19%, rebounding from its trough at the end of last year .
According to investors, this year's stock appreciation stems in large part from a change in the Fed's outlook for being more accommodative in terms of interest rate policy.
But there have always been significant equity outflows over the past year, said Keith Lerner, chief markets strategist at SunTrust Advisory Services in Atlanta.
"Despite the new highs of the market, the market sentiment has been relatively sour," said Lerner. "But if we stay above (3,000), some people who have left the sideline will start coming back to this market."
Caroline Valetkevitch and April Joyner in New York and Manas Mishra in Bengaluru; edited by Alden Bentley and Nick Zieminski