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S&P 500 Tops 2000 but Fails to Hold It for the Day

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the S&P 500 index briefly topped 2000 points and closed at a record high
That didn’t take long. There was wide speculation before the opening bell Monday that the Standard and Poor’s 500 (S&P 500) would break through the 2,000 point barrier in the near future. That’s exactly what it did at 10:11 am EST, but the index couldn’t manage to hold the mark at the close, falling to 1,997.92 when the final bell rang. Despite not closing above the 2,000 point landmark, the index still closed at an all-time record high, and it’s that much closer to closing above the milestone mark.

While there isn’t a whole lot of fundamental significance with S&P 500 passing the 2,000 point barrier, there is a psychological significance with traders and investors. It solidifies the nearly six year rally it’s taken to get to this point since March 2009, when it hit a low during the financial crisis. Since then it’s tripled its value and is up 196%.

Over the last 12 months, the S&P 500 has managed to climb through 1,700 points, 1800 points, 1,900 points and now 2,000 points. It took just over three months (94 days) for the index to go from 1,900 to 2,000 points. It is now up almost 8% for the year.

It’s been good news all around for investors. Signs of an improving US economy have helped stocks to rally for three straight weeks. While there has been some geopolitical worries, especially between Russia and Ukraine, the strong economic data has allowed them to overcome these for the most part. That being said, an escalation in conflict in Ukraine or in Iraq could quickly send stocks lower.

Many analysts are predicting the S&P 500 will end the year above 2,000. While their final estimates vary widely, it seems that most now see a 2,000+ point future for the index. That being said, most analysts no longer see stocks as being cheap as they are close to historical norms. There are even bears starting to speak up that prices are at the point of creating a bubble.

If the index is going to end above that mark this week, it will need to stay positive on some of the news being released this week. That includes the release of the Service Sector Outlook Survey for August from the Federal Reserve Bank of Dallas and the building permit numbers for July from Department of Commerce. Numbers on durable goods for July will also be released Tuesday, as well as a report on consumer confidence for August.

On Wednesday, the weekly Mortgage Market Index will be released by the Mortgage Bankers Association. Then on Thursday GDP data for the second quarter will be released by the Department of Commerce, the National Association of Realtors will release the July Pending Home Index and Dollar General is schedule to release its second quarter results.

The other indexes had a good day as well. The Dow Jones industrial average increased 75.65 points (0.44%) to end the day at 17,076.87, and the Nasdaq Composite rose 18.80 points (0.41%) to end at 4,557.35.

(Photo courtesy of joel)

Apple Stock Continues to Soar Reaching Another All-Time High

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Apple stock is on fire hitting another all time high on Wednesday
Apple stock is on fire. Another day, and the company records another record high. After a long two year wait, the technology company’s stock reached a record all-time high on Tuesday closing at $100.53 per share, ahead of the $100.30 split-adjusted price per share from September 11, 2012. The records continued on Wednesday with the stock closing at another record high of $100.57 per share. The stock had gone as high as $101.09 during Wednesday afternoon trading.

The latest rally in the stock has seen it rise by 25% since the beginning of the year, over three times as much as the S&P 500, which is up 7.2% for the year. It also makes Apple the world’s most valuable company, with a market capitalization $602 billion, which is 30% higher than the number two company Exxon Mobile.

Investors soured on the stock with questions of whether or not the company could produce the innovative tech gadgets that capture consumer’s attention without Steve Jobs at the help of the company. They have come to the conclusion that the company can, especially with an anticipated iPhone 6 (retailers started discounting the iPhone 5s a few weeks ago) and an Apple device to be worn on the wrist set to hit the market later this year. Analysts are predicting the iPhone 6 will bring about record sales with the iWatch device providing an entirely new gadget from which the company will be able to produce revenue.

The question is will the stock be able to continue its momentum after the release of the next generation of iPhone. Apple has a history of its stock rising in the weeks ahead of a major new product launch, then dip in the months following it. The iPhone 6 is expected to launch in early September. The company has also had a hard time maintaining a price above the $100 a share barrier, which investors seem to have trouble overcoming.

The rise in stock prices is seen as an affirmation toward Apple’s Chief Executive Tim Cook, and his vision for the company going forward, including his insistence that the company will enter a new product category in 2014, which is assumed to be the smartwatch market. The anticipation of new products has caused a lot of excitement, especially when insiders like iTunes chief Eddy Cue say that those devices in line to be released are the best new slate of products the company has had in 25 years.

(Photo courtesy of GDS-Productions)