Richard Drew, Associated Press
NEW YORK — For the second time in less than a month, the stock market marched past another milepost on its long, turbulent journey back from the Great Recession, toppling another record left over from the days before government bailouts and failing investment banks.
The Standard & Poor's 500 closed at a new high Thursday, three weeks after another popular market gauge, the Dow Jones industrial average, obliterated its own closing record. The S&P capped its best quarter in a year, rising 10 percent. The Dow had its best first quarter in 15 years, climbing 11 percent.
The reaction on Wall Street was muted — more of a dull buzz than a victory cry. Investors warned clients not to get overly excited.
"Getting back to where we were is an important step," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. But he cautioned in a note to investors: "Markets are volatile, and if you are a long-term investor you should expect declines."
The S&P 500 rose 6.34 points, or 0.41 percent, to 1,569.19, beating by four points its previous record of 1,565.15 set on Oct. 9, 2007. The index is still shy of its all-time trading high of 1,576.09.
The index has now recovered all of its losses from the recession and the financial crisis that followed. Investors who put their dividends back into the market have done even better. A $10,000 investment in the S&P back in October 2007 would be worth $11,270.
On any other day, a gain of that size would go unheralded, but not after the turmoil that began in late 2008 and persisted through a slow, sometimes stalled recovery. The milestone generated chatter at water coolers and on business news channels.
The S&P 500 is a barometer that gauges market performance. And while professional investors might scoff at using it to decide when to buy and sell, the breaking of an old record can be psychologically important.
When the S&P 500 last closed this high, it was a headier time. In the fall of 2007, the financial crisis was simmering but hadn't yet boiled over. It was an era before big bailouts and the Great Recession, back when jobs were much easier to come by and salaries seemed to go only up. Bear Stearns still existed. So did Lehman Brothers and Washington Mutual.
Investors have reason to be cautious.
The U.S. economy is stable, but growth is anemic. The European debt crisis is far from resolved. Some investors are concerned that the market's gains this year are being fueled by the Federal Reserve's easy money policy, and will disappear once the Fed reverses course.
The crisis-of-the-moment is Cyprus, the Mediterranean island country that struggled this week to get an emergency bailout from other countries. For many investors, the bailout deal was a reminder of Europe's lingering economic problems.
On Thursday, U.S. economic news was mixed.
The U.S. economy grew faster than first estimated in the fourth quarter, the government reported. But the growth, an annual rate of 0.4 percent, was still weak. The number of Americans seeking unemployment aid jumped for the second straight week. Longer-term, though, jobless claims have been declining since November. Unemployment is 7.7 percent, versus the 4.7 percent in 2007.
"If you're a bull or a bear, you could find enough news out there to convince you of your position," said Jim Lauder, CEO of Global Index Advisors in Marietta, Ga., and co-portfolio manager on Wells Fargo Advantage Dow Jones Target Date Funds.
Cyprus reopened its banks after closing them for nearly two weeks to keep depositors from making panicked withdrawals. Portugal reported that its budget deficit was widening.
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