S&P hits new high in broad rally, Wall St up 1 percent

By Ryan Vlastelica

NEW YORK (Reuters) - The S&P 500 rose to a historic high on Wednesday as U.S. stocks advanced 1 percent in a broad rally, with technology shares among the strongest of the day.

For the second day in a row, cyclical shares advanced as investors bought into the sector, which has lagged other sectors recently. As these groups are closely tied to the pace of economic growth, many investors viewed the advance as a sign that the rally has staying power.

The S&P 500 broke past its previous all-time intraday high of 1,576.09, which was set on October 11, 2007, rising as high as 1,587.80. The Dow hit yet another intraday milestone, rising as high as 14,817.06.

 

"The path of least resistance for the market remains higher, and despite some mixed economic data, investors are concluding that stocks remain a better place to be than risk-free assets," said Jim McDonald, chief investment strategist at Chicago-based Northern Trust Global Investments, which has about $760 billion in assets under management.

Gains were broad, with all but two of the S&P's 10 primary sectors up more than 1 percent. About three-fourths of stocks traded on both the New York Stock Exchange and Nasdaq were higher on the day.

Tech was the day's strongest group, with the S&P technology sector up 1.8 percent. The group was lifted by strong results at Adtran Inc, which jumped 12.6 percent to $22.19 and boosted peer companies. JDS Uniphase Corp added 5.7 percent to $14.11 while Juniper Networks Inc rose 5.4 percent to $18.97.

Also boosting the sector was Facebook Inc , which jumped 4.4 percent to $27.77.

The Dow Jones industrial average was up 138.49 points, or 0.94 percent, at 14,811.95. The Standard & Poor's 500 Index was up 18.53 points, or 1.18 percent, at 1,587.14. The Nasdaq Composite Index was up 56.74 points, or 1.75 percent, at 3,294.60.

With the gains, the S&P is now up 11.3 percent on the year while the Dow is up 13 percent.

The Federal Reserve unexpectedly released the minutes from its most recent policy-setting meeting five hours early. The minutes showed a few policymakers expected to taper the pace of asset purchases by mid-year and end them later this year, while several others expected to slow the pace a bit later and halt the quantitative easing program by year-end.

Accommodative monetary policy from the Fed has been credited with helping to boost equity prices, and uncertainty surrounding the minutes briefly hit indexes in the premarket session, though they subsequently recovered.

"The only way quantitative easing will be tapered off is if the labor market shows noticeable improvement, and the most recent data doesn't show that," said McDonald, referring to the March payroll report, which was sharply under expectations.

"QE will only be taken away when we're in a self-sustaining recovery. We're not there yet, which points to the Fed continuing to stimulate the economy."

Among the 5 percent of S&P 500 companies that have reported results so far, almost three-quarters have topped expectations, according to Thomson Reuters data.

But quarterly profits are expected to grow just 1.5 percent from a year ago, down from a January estimate of 4.3 percent. The lowered expectations could make it easier for companies to beat analysts' estimates and propel the market further.

Family Dollar Stores reported weaker-than-expected profit on Wednesday. Its stock was up 0.1 percent at $59.87 after falling 2.6 percent to a session low of $58.27 earlier.

Hospital operator Health Management Associates Inc cut its outlook for 2013 earnings and revenue, citing weak patient-admission figures in the first quarter of the year. The stock plummeted 18 percent to $10.27.

(Editing by Nick Zieminski)