S&P 500 ends above 1,800 for first time

Nov 23 2013, 12:08 IST
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A trader works on the floor of the New York Stock Exchange. A trader works on the floor of the New York Stock Exchange.
SummaryDow industrials also ended at another record high above 16,000.

Stocks rose on Friday, with the S&P 500 closing above 1,800 for the first time and healthcare names leading the way higher.

The Dow industrials ended at another record high above 16,000.

Both the Dow and the S&P 500 recorded their seventh straight week of gains in what has been a very strong year for stocks. The seven-week advance comes just ahead of December, which since 1950 has been the best month for both the Dow and the S&P.

"We're advising our clients to take this ride until the end of the year," said Drew Nordlicht, managing director and partner at Hightower San Diego.

The Nasdaq Biotech Index jumped 3 per cent, driven by a surge in Biogen Idec.

Shares of Biogen shot up 13.2 per cent on heavy volume to $285.62 after the company won 10 years of exclusivity protection for its multiple sclerosis drug, Tecfidera, from regulators in Europe.

"Healthcare is the place to be. It's a hot area. People want stocks in healthcare, industrials and consumer discretionary. That's where tactical investors have been focused, and that's where the money has been flowing," said Michael Matousek, head trader at U.S. Global Investors Inc, in San Antonio, Texas.

European regulators also recommended approval of a new drug for hepatitis C from Gilead Sciences, which pushed its shares up 3.7 per cent to $74.27.

The S&P 500 healthcare sector index has gained 37.5 per cent so far in 2013, making it the S&P 500's best-performing sector this year.

Such moves give investors who have enjoyed some of the 26.5 per cent surge in the S&P 500 this year an opportunity to reduce their positions ahead of an eventual market correction.

The CBOE Volatility Index fell 3.2 per cent to close at 12.86.

With volatility low and the price of options cheap, "you can lighten your stock position, but replace it with a derivative. This way, if the market were to tank, you would lose a lot less on the derivative than you would lose on the stock," Matousek said.

The Dow Jones industrial average rose 54.78 points, or 0.34 per cent, to end at a record 16,064.77. The Standard & Poor's 500 Index gained 8.91 points, or 0.50 per cent, to finish at 1,804.76. The Nasdaq Composite Index climbed 22.50 points, or 0.57 per cent, to close at 3,991.65.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said on CNBC that reducing the pace of the central bank's bond-buying program will

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