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S&P 500 climbs back above 1,800
New York » Good news in the drug industry pushed the stock market deeper into record territory on Friday.
The Dow Jones industrial average continued its upward march after finishing above 16,000 for the first time Thursday. The broader Standard & Poor's 500 index inched toward its own milestone close above 1,800.
Health care stocks led the market's gains. Biotechnology company Biogen Idec surged on reports that it won market exclusivity for its top-selling multiple sclerosis drug in Europe. Time Warner Cable jumped after the Wall Street Journal reported that Charter Communications was close to a bid for the company.
The stock market is on track for its best year in a decade. Major indexes have surged as a combination of solid corporate earnings, a strengthening economy and easy-money policies from the Federal Reserve have drawn investors to stocks.
The S&P 500 index rose seven points, or 0.4 percent, to 1,803 as of 2:36 p.m. Eastern Time. The Dow gained 39 points, or 0.3 percent, to 16,049. The Nasdaq composite rose 20 points, or 0.5 percent, to 3,989.
Biogen rose $29.57, or 12 percent, to $282, making it the top gainer in the S&P 500 index. Time Warner gained $11.25, or 10 percent, to $132.19.
Ross Stores, meanwhile, fell $4.65, or 6 percent, to $75.69 after the company said it anticipates intense competition and discounting during the holiday shopping season. The discount retailer fell the most in the S&P 500 index.
The S&P 500 index has gained 26.3 percent this year. If it finishes at that level, it will be the strongest year for the index since it advanced 26.4 percent a decade ago.
Given the strong gains this year, stocks are no longer a bargain.
"I'm not pounding the table anymore saying this is the cheapest U.S. equity market in decades," said Andres Garcia-Amaya, a global market strategist at J.P. Morgan Funds.
While investors shouldn't necessarily sell, they should temper their expectations for the level of returns they will see going forward, he said.
The price-earnings ratio of S&P 500 companies, a measure of how much investors are willing to pay for a stock in relation to its earnings, has climbed to 14.9 from 12.6 at the start of the year.
In government bond trading, the yield on the 10-year Treasury note fell to 2.75 percent from 2.79 percent on Thursday.
In commodities trading, the price of oil dropped 65 cents, or 0.7 percent, to $94.79 a barrel. Gold was flat at $1,242.80 an ounce.
Among other stocks making big moves
— Foot Locker rose $1.73, or 4.8 percent, to $38.51 after the company reported earnings that beat the expectations of Wall Street analysts.
—— Intel fell $1.36, or 5 percent, to $23.87, after the company said Thursday that it expected revenues to be flat next year. Analysts had expected a small increase.