U.S. stocks rise, sending S&P 500 to record high

The U.S. stock benchmark Standard & Poor’s 500 index Thursday reached an all-time high as Wall Street remained upbeat on the economic outlook for the second quarter.

TheDow Jones Industrial Average climbed 65.56 points, or 0.39 percent, to close at 16698.74. The S&P 500 added 10.25 points, or 0.54 percent, to 1920.03. The Nasdaq Composite advanced 22.87 points, or 0.54 percent, to 4247.95. The yield on the benchmark 10-year Treasury note rose 0.02 percentage points to 2.46 percent, the lowest since June, according to Bloomberg LP.

“Investors view equities as the only asset class that offers prospects for decent returns, especially if economic growth accelerates and fundamentals improve,” said William Lynch, director of Investments at Hinsdale Associates. “Stocks today reflect this optimism.”

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(Shu Zhang/MEDILL)

The Commerce Department said U.S. gross domestic product decreased at a seasonally adjusted annual rate of 1 percent in the first quarter because of an unusually frigid winter. The GDP was initially reported as having risen 0.1 percent.

“The focus will be on the second quarter, as it should have the weather effects removed,” said Paul Nolte, portfolio manager at Kingsview Asset Management LLC.

Economists polled by Bloomberg expect GDP to expand at a 3.5 percent annual rate in the current quarter.

The best-performing stock was Tyson Foods Inc, up 6 percent to close at $43.25 per share, after the second-largest U.S. pork producer jumped into a $6.2 billion offer to buy Chicago-based Hillshire Brands Co., maker of Jimmy Dean sausages. The bidding outstripped the $5.5 billion Pilgrim’s Pride offered for Hillshire earlier this week.

Pioneer Natural Resources Co. advanced 3.5 percent to close at $210.15 per share, the highest level since November, after analysts at FBR Capital Markets lifted the target price on its shares from $250.00 to $275.00 Thursday.

Biogen Idec Inc. also rose 3.6 percent to close at $319.85 per share after JP Morgan raised its rating to Overweight.

Netflix Inc. gained 3.5 percent to close at $415.2 per share, the highest since March, after the the world’s leading Internet-streaming network announced it will exclusively air new seasons of the award-winning series “Dreamworks Dragons” in spring 2015, based on the popular “How to Train Your Dragon” films.

The worst performer was Michael Kors Holdings Ltd, down 5 percent to close at $92.28 per share, the biggest loss since December, after the seller of high-end clothing and accessories Wednesday said its profit margins will go “down slightly” next year as a result of global expansion. The stock price has quadrupled since its New York listing in December 2011.

The Labor Department’s weekly report on state unemployment benefits showed a better-than-expected labor market. Jobless claims in the week ended May 24 plummeted 8.3 percent from the previous week to 300,000, driving the four-week moving average to the 311,500, the lowest since August 2007, before the recession started.

“A knee-jerk reaction would be to say that the claims figures show an improving labor market,” said Nate Kelley, associate economist of Moody’s Analytics. “However, the pace of hiring needs to pick up, something that seems to be happening slowly but surely as business confidence improves.”

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