All three Wall Street indexes ended at record highs for the first time since New Year's Eve, 1999, as surging oil prices and strong earnings from department stores Macy's and Kohl's buoyed investor sentiment.
The S&P; 500 gained 0.5 per cent to 2,185.79, extending this year's advance to 6.9 per ent. The Dow Average and Nasdaq added more than 0.4 per cent.
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Wall Street just shy of record high
A rebound in oil prices added to optimism sparked by earnings reports that beat low expectations, lifting stocks just a couple percentage points away from record highs.
Fresh records in US stocks are getting harder for strategists to ignore. Wells Fargo & Co. became just the second of 21 firms tracked by Bloomberg to raise its target for the S&P; 500 since the measure surged past the group's average year-end prediction a month ago. Gina Martin-Adams, the bank's chief US equity strategist, now expects the benchmark for American equities to climb to 2,200 in 12 months.
"I'm a bit surprised to see us hitting record highs again," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin. "We are pretty topped out and we should move sideways for awhile."
![Wall Street is partying like its 1999](/web/20160812060618im_/http://www.smh.com.au/content/dam/images/g/q/q/r/k/l/image.related.articleLeadwide.620x349.gqqral.png/1470961629581.jpg)
"We're continuing to grind higher," said Stephen Carl, principal and head equity trader at Williams Capital Group LP in New York. "You had some retail earnings that came in better than expected. Economic numbers such as jobless claims didn't do anything to challenge the strength."
Department stores were the big winners with Macy's, Kohl's and J.C. Penney shares all rising. Macy's soared 17.09 per cent , marking the best day for the department store operator in nearly eight years after it reported a smaller-than-expected drop in quarterly comparable-store sales and said it would close 100 stores.
Kohl's shares rose 16.17 per cent after its quarterly profit beat estimates.
J.C. Penney, which reports on Friday, surged 8.63 per cent .
![Wall Street indexes are creeping higher.](/web/20160812060618im_/http://www.smh.com.au/content/dam/images/g/p/v/0/h/i/image.related.articleLeadwide.620x349.gqqral.png/1470961629581.jpg)
Crude oil jumped as much as 5.0 per cent on comments from the Saudi oil minister about potential action to stabilise prices and the International Energy Agency's forecast that crude oil markets would rebalance in the next few months.
Robust US economic data also helped on Thursday, with a report showing the number of Americans applying for unemployment benefits fell to 266,000 from 269,000 the previous week.
![Macy's has announced it is closing 100 stores.](/web/20160812060618im_/http://www.smh.com.au/content/dam/images/1/0/r/h/3/d/image.related.articleLeadwide.620x349.gqqral.png/1470961629581.jpg)
In slow trade, about 5.98 billion shares changed hands on U.S. exchanges, compared with the 6.43 billion daily average over the last 20 sessions.
Alibaba rose 5.1 per cent after the Chinese e-commerce giant posted a 59 per cent jump in quarterly revenue.
Earnings optimism on the slide
Optimism is a necessary thing in business, it helps us get out of bed in the morning. With the local reporting season about to get serious, it's worth pointing out that such optimism needs to be tempered with reality.
Valeant dropped 10.4 per cent after the Wall Street Journal reported that U.S. federal prosecutors had opened a criminal investigation on the drugmaker.
Advancing issues outnumbered declining ones on the NYSE by a 1.63-to-1 ratio; on Nasdaq, a 1.76-to-1 ratio favoured advancers.
The S&P; 500 posted 34 new 52-week highs and no new lows; the Nasdaq Composite recorded 97 new highs and 29 new lows.
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