Wall St. hits several highs

Stock prices shot higher Wednesday, sending the Standard & Poor’s 500 index to its first record close in more than seven years, as investors grew more confident that the Federal Reserve might cut interest rates this year.

The Dow Jones industrials also marked a record close, their 47th since the start of October.

The S&P; 500, widely considered the best barometer of U.S. stocks, jumped 12.12 points, or 0.8%, to 1,530.23, surpassing the record of 1,527.46 points that was set March 24, 2000, at the peak of the dot-com boom.

The index of 500 of the nation’s biggest companies was powered by investors’ relief about the minutes of the Fed’s May 9 meeting.

The central bankers called inflation “uncomfortably high,” a stance that made it less likely that the Fed would cut rates.

But the monetary officials acknowledged that they had underestimated the U.S. housing slump. That raised the possibility that they hadn’t ruled out lowering rates. The central bank has left rates unchanged at 5.25% for seven straight meetings.

“Wall Street took the minutes to mean that later on this year there will be more of a chance for a rate cut, and people rallied on that,” said Ryan Larson, senior equity trader at Voyageur Asset Management. “It put a cut back on the table, and that’s what led to these record index closes.”

The S&P; 500, which crossed its closing record on May 21 and then retreated, remains below its all-time trading high of 1,552.87, also reached in March 2000.

The Dow, the first of the major market indexes to fully recover from Wall Street’s prolonged slump in the early part of the decade, climbed 111.74 points, or 0.8%, to 13,633.08. The Dow also reached a new trading high of 13,636.09.

The recovery of the S&P; 500 comes as the index holds fewer technology stocks than in 2000. Financial companies, which now make up the largest slice of the index, have helped drive the market’s run since the second half of last year.

By comparison, the Nasdaq composite index is unlikely to surpass its closing high of 5,048.62 points, set March 24, 2000, anytime soon. On Wednesday, the tech-dominated gauge closed up 20.53 points, or 0.8%, at 2,592.59.

The record closes for the S&P; and Dow came after share prices opened sharply lower after a slide in China’s often-volatile stock markets. But U.S. investors remained resilient and pushed prices back up after concluding that China’s problems were probably limited to China.

“The market is just showing that it is ignoring potholes, which means we still have upside momentum. We had two good reasons for the market to stumble today, but it ignored both,” said Al Goldman, chief market strategist at A.G. Edwards in St. Louis. “You are in a market where people are in a glass-is-half-full attitude.”

The S&P;’s advance is of greater significance to many investors than the Dow’s numerous records of late. There are more investments, such as mutual funds, that track the S&P; 500. Such funds are an integral part of many retirement plans.

The Russell 2000 index of smaller-company stocks also closed at an all-time high, rising 5.82 points, or 0.7%, to 843.35. The large-cap Russell 1000 and the broader Russell 3000 also hit record closes.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange.

Bond yields fell after the release of the Fed minutes but then rebounded. The yield on the benchmark 10-year Treasury inched down to 4.87% from 4.88% late Tuesday.

The dollar gained against the yen and the euro, while gold prices fell. Crude oil futures rose 34 cents to $63.49 a barrel on the New York Mercantile Exchange.

In other market highlights:

* Bookseller Borders Group fell $1.10, or 4.7%, to $22.22 after it reported late Tuesday a wider loss in the first quarter than a year earlier.

* Apple climbed $4.42, or 3.9%, to $118.77 after two brokerages raised their price projections for the stock.

* Higher oil prices boosted energy stocks. Exxon gained $1.38, or 1.7%, to $84. ConocoPhillips, the No. 2 U.S. refiner, gained $1.95, or 2.6%, to $77.30.

* Real estate shares surged a third day amid takeover speculation. Simon Property Group advanced $3.35, or 3.2%, to $108.75. Public Storage, the largest U.S. owner of self-storage units, jumped $4.32, or 5.1%, to $89.40.

* Boeing advanced $2.05, or 2.1% to close at $100.55 amid optimism about its orders.

* Caterpillar was the Dow’s biggest gainer, climbing $2.73, or 3.6%, to $78.48.

* Biogen Idec jumped $2.92, or 5.9%, to $52.13 a day after the pharmaceutical company said its board had authorized a $3-billion share repurchase.

* Viacom rose 67 cents, or 1.5%, to $44.53 after the entertainment company said it planned to buy back as much as $4 billion of common stock.

* Technology supplier CDW rose $2.06, or 2.5%, to $85.17 after confirming it had agreed to be bought for $7.3 billion.

* Overseas, key stock indexes fell 6.5% in China, 0.5% in Japan, 0.4% in Britain, 0.6% in Germany and 0.5% in France.