S&P 500 Index Surpasses Record Level, Q4 GDP Estimate Lifted

Nichole Harper
28 Mar, 2013
New York City

The S&P 500 index traded above its all-time closing high and the government revised the estimate of fourth quarter economic growth to 0.4% annual rate. Jobless claims in the last week rose. Banks in Cyprus opened with stringent capital controls in place.

[R]1:45 PM New York – The S&P 500 index traded above its all-time closing high and the government revised the estimate of fourth quarter economic growth to 0.4% annual rate. Jobless claims in the last week rose. Banks in Cyprus opened with stringent capital controls in place.[/R]

Financial markets offered another day of vote of confidence in the improving U.S. economic outlook and rising expectations for earnings growth.

The S&P 500 index surpassed its all-time closing high that was established in 2007, signaling wider recovery among larger companies.

The narrow Dow Jones Industrial Average is trading at a new high for few days but the Nasdaq is still lagging the other market averages.

The S&P 500 index closed at its record peak on October 9, 2007 and reached 1,565.15. The market recovery took more than five years after the sustained and large financial support from the Federal Reserve despite the growing chorus of Republican lawmakers against.

The market advance has been sustained in the first quarter of this year and the S&P 500 index has lagged other domestic averages but is the second best performing market index among the developed markets only surpassed by 19% rise in Japan.

The Commerce Department revised economic growth for the fourth quarter to 0.4% annual rate from the second estimate of 0.1%. The quarterly increase was the slowest since the first quarter in 2011.

The government had earlier estimated an increase of 0.1% and estimated in the first estimate that the economy shrank 0.1%.

In the third quarter the economy expanded at 3.1%.

Economists are estimating economic growth to increase to 2.5% rate in the quarter that is ending at the end of this week.

A separate report from the Department of Labor showed that initial claims filed at the end of last week increased 16,000 to 357,000 adjusted for seasonality.

Banks in Cyprus reopened amid calm among depositors after the government placed stringent capital controls.

The banks reopened after almost two weeks of closure as the government negotiated 10 billion euros bailout with European lenders.

Central Bank of Cyprus said in a note released on Thursday that depositors from other euro zone countries withdrew 18% of their deposits.

Overall, private sector bank deposits declined 2.2% to 46.4 billion euros at the end of February.

The ruling from finance ministry prevented withdrawals more than 300 euros a day and banned cashing of all checks.

Central bank will also review all commercial transaction above 5,000 euros and look closely at all transaction above 200,000 euros.

Stocks in Review

Accenture plc gained a fraction after the outsourcing services provider said second quarter revenues increased 4%.

GameStop ((GME)), the video game retailer said

Research in Motion, the maker of popular BlackBerry mobile devices gained more than 2% after the company reported a surprise fourth quarter profit.

FiveBelow ((FIVE)) declined 4% after the retailer estimated weak full-year results.