The US stock market posted its best day this year, with Tuesday''s late spark coming from J.P. Morgan Chase & Co after the bank announced it will raise its dividend. The S&P 500 closed at a level not seen since June 2008 in a sign that the market foresees more strength in the US economy in coming months. The index, already up 11 percent this year, has risen for five straight days and appears set for more gains.
Banks led the way with a powerful kick into the close. J.P. Morgan Chase & Co surged 7 percent to $43.39 and was the Dow''s top gainer after announcing it will raise its dividend and unveiling a $15 billion stock-buyback program. Bank of America Corp gained 6.3 percent to $8.49 while an S&P index of financial stocks climbed 3.9 percent.
"That kind of put us into fourth gear here," said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston. "The financials have been such a drag on the whole market for the last couple of years." The Nasdaq Composite hit an intraday high at 3,039.89, its highest mark since November 2000.
Tuesday marked the first time that the Nasdaq closed above 3,000 and the Dow ended above 13,000 on the same day. The S&P 500''s move above 1,390 puts the broad-market index in position to surpass 1,400, which could bring out more buyers. The S&P 500 index reached 1,396.13, its highest intraday level since June 2008.
Underscoring the upbeat sentiment, the CBOE Volatility Index or VIX, hovered near levels not seen since mid-2007. Its 14-day moving average is at its lowest since last June. The Dow Jones industrial average shot up 217.97 points, or 1.68 percent, to 13,177.68 at the close. The Standard & Poor''s 500 Index rose 24.87 points, or 1.81 percent, to 1,395.96. The Nasdaq Composite Index climbed 56.22 points, or 1.88 percent, to 3,039.88.
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