NEW YORK – The Standard & Poor's 500 index topped 1,500 for the first time since September 2000 Thursday after a series of indicators showed signs of strength in the economy and a moderate rise in wage inflation.
The Dow Jones industrial average was up 29.50 points, or 0.22 percent, at 13,241.38. The Standard & Poor's 500 Index was up 6.47 points, or 0.43 percent, at 1,502.39. The Nasdaq Composite Index was up 7.62 points, or 0.30 percent, at 2,565.46.
The Dow industrials closed at a record for the third straight day, led by a 3.7 percent gain in Verizon Communications Inc. (VZ) on news that it is taking video and Internet customers from rival Cablevision (CVC) Systems.
Transportation shares were particularly strong. The Dow Jones transportation average rose 1.4 percent after freight forwarder Expeditors International results helped push up other shares in the transportation sector.
Reports showing greater-than expected growth in the vast services sector, a faster-than-expected increase in productivity and slowing labor cost gains combined to drive demand for stocks. The indicators precede the widely anticipated monthly payrolls report, which is forecast to show employers created 100,000 jobs in April.
"The data was encouraging, unit labor costs are under control and productivity while slowing down, is improving," said Michael Metz, chief investment strategist at Oppenheimer & Co. in New York. "The real kicker will be jobs report. If it's somewhere between 80,000 to 120,000 that would validate the thesis we're having a slowdown, but not a contraction in the economy."
The Dow's gains trailed the other indexes, hampered by shares of General Motors (GM) Corp. The automaker reported a sharp drop in first-quarter earnings that missed Wall Street estimates after mortgage-related losses at its GMAC financing affiliate more than offset gains in automotive operations.
Nonetheless, the Dow has climbed nearly 10 percent in the past seven weeks, about the amount it averages in an entire year. The Nasdaq, meanwhile, passed a milestone on Thursday as it is now worth fully half of its record high of 5,132.52.
"Institutions have egg on their faces because they were underinvested and they are paid to manage stocks, not cash. Now they are throwing money at the market in almost a buying panic," said Al Goldman, chief market strategist at A.G. Edwards in St. Louis.
Expeditors shares gained 5.2 percent to $45.13 on the Nasdaq. GM shares fell 5.4 percent to $30.70.
Shares of Monster Worldwide (MNST) Inc. shot up 8.6 percent to $47.83 on the Nasdaq amid speculation the parent of the jobs site Monster.com may be a takeover target.
Trading was moderate on the NYSE, with about 1.59 billion shares changing hands, below last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.15 billion shares traded, above last year's daily average of 2.02 billion.
Advancing stocks outnumbered declining ones by a ratio of about 7 to 5 on the NYSE, while on Nasdaq, decliners nearly matched advancers.