NEW YORK: The stock market vaulted past another milestone on Friday.
The Standard & Poor’s 500 index closed above 1,800 for the first time, capping seven straight weeks of gains.
The broader index is on track for its best performance in 15 years as a combination of solid corporate earnings, a strengthening economy and easy-money policies from the Federal Reserve draw investors to stocks. Stocks have also gained because they offer an attractive alternative to bonds, where interest rates remain close to all-time lows.
“You can’t really get better returns other than in the stock market,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “It’s been a quality run-up in stocks.”
The S&P 500 index rose 8.91 points, or 0.5 percent, to 1,804.76. The index has advanced 26.5 percent in 2013. If it finishes at that level, it would be its strongest year since a 26.7 percent gain in 1998.
The Dow Jones industrial average also continued its upward march after finishing above 16,000 for the first time Thursday. The index gained 54.78 points, or 0.3 percent, to 16,064.77.
The Nasdaq composite rose 22.49 points, or 0.6 percent, to 3,991.65.
On Friday, health-care stocks led the market’s rise. Biotechnology company Biogen Idec surged on reports that it won market exclusivity for its top-selling multiple sclerosis drug in Europe. The company’s stock jumped $33.19, or 13 percent, to $285.62.
Health-care stocks have also led gains in the S&P 500 this year, rising 38 percent. The industry is attractive to investors. Some of its companies, like Biogen Idec, offer the possibility of explosive growth. Others are established players like Pfizer, which pays big dividends. Health insurance companies have also done well this year as the Affordable Care Act rolls out.
Despite their big gains, stocks could continue to rise. The economy is forecast to keep recovering and that helps companies increase their earnings. And while stock valuations have risen, they are still attractive compared with bonds.
However, investors will likely have to look harder to find winning stocks next year, said Paul Hogan, co-manager of the FAM Equity-Income Fund.
“We’ve had the rising tide, but going forward, it’s the stock pickers that will tend to do better.”