NEW YORK ( TheStreet) -- The Dow Jones Industrial Average booked a third-consecutive all-time closing high as the major U.S. equity indices continued their 2013 rally, despite growing uncertainty that stocks could continue their gains.
The S&P 500 hovered around multi-year highs, after an impressive read on the U.S. labor market and as the U.S. dollar fell.
Bank stocks and Boeing (BA) were some of the biggest advancers of the day.
The S&P 500 has been inching closer and closer toward its all-time closing high of 1565 reached in October 2007.But Brian Amidei, a Palm Desert, Calif.-based managing director at HighTower Advisors, cautioned that all these new highs in the markets need to be taken with "a grain of salt" as the landscape today is very different than in 2007. "We have never seen this much Fed intervention and this low of an interest rate environment in any past markets." Amidei said when the S&P 500 was at its peak in 2007, trailing 12-month corporate earnings were $89.35 a share, producing a price-earnings ratio of 17.5. Earnings today, meanwhile, are at $98.30 a share, with the market currently trading at an earnings multiple of about 14.8. If the S&P 500 were trading at the same earnings multiple as at its 2007 peak, the index would be at 1722, roughly 18% higher than the current level, he explained. "You cannot argue with the price/earnings ratio as being cheap right now, but since we are in uncharted waters, I am recommending clients proceed with caution and add to the market on pullbacks," said Amidei. The Dow rose 33.25 points, or 0.23%, to 14,329.49. Breadth was positive, with winners outnumbering losers 20-10. Boeing, Bank of America (BAC), Alcoa (AA) and JPMorgan (JPM) shares climbed furthest. Financial stocks rose ahead of the Federal Reserve's annual stress test results set to arrive after the closing bell Thursday. Boeing shares closed up 2.5% and jumped to their highest level since June 2008 after Reuters reported that U.S. safety regulators could approve in just days a plan to allow the aerospace giant to begin flight tests of the 787 Dreamliner with a fix for its volatile batteries. Hewlett-Packard (HPQ), Merck (MRK) and Exxon (XOM) shares were declining the most. The S&P 500 finished higher by 2.8 points, or 0.18%, at 1,544.26. The Nasdaq added 9.72 points, or 0.3%, at 3,232.09. Sector action was mostly positive in the broader market. Capital goods, conglomerates, energy and financials posted the biggest sector gains, while consumer cyclicals and transportation were the only sectors in the red. Volumes totaled 3.61 billion on the New York Stock Exchange and 1.67 billion on the Nasdaq. Advancers overtook decliners by a ratio of 1.4-to-1 on the Big Board and 1.6-to-1 on the Nasdaq. A raft of U.S. economic data was released Thursday, ahead of Friday's widely watched nonfarm payrolls report for February. The Labor Department said initial jobless claims in the week ended March 2 were 340,000, a decrease of 7,000 from the previous week's upwardly revised figure of 347,000. This is the third time in four weekly reports where levels came in below 350,000. The four-week moving average was 348,750, a decrease of 7,000 from the prior week's 355,750. Economists were expecting claims to rise to 355,000. "The general improvement in labor market conditions as indicated by the decline in claims is consistent with tomorrow's non-farm payrolls report showing that another 145,000 jobs were added in February," said Dawn Desjardins, assistant chief economist at RBC Economics. Continuing claims in the week ended Feb. 23 came in at 3.094 million, an increase of 3,000 from the preceding week's upwardly revised level of 3.091 million. Economists were expecting continuing claims of 3.11 million. The latest Challenger Gray & Christmas report said planned job cuts increased for the second consecutive month in February as U.S.-based employers announced work force reductions totaling 55,356, up 37% from 40,430 in January. The Census Bureau reported the U.S. trade deficit widened to $44.4 billion in January from a downwardly revised $38.1 billion. Expectations were for a widening to $43 billion. The Bureau of Labor Statistics said nonfarm labor productivity fell 1.9% in the fourth quarter, vs. the prior estimate of a decline of 2%. Predictions were for a 1.6% fall. Unit labor costs rose 4.6% in the quarter, compared with the prior estimate of a 4.5% increase and expectations of a 4.2% rise. The Federal Reserve reported credit rose by $16.15 billion in January, from an upwardly revised $15.1 billion. Expectations had been for a $12.8 billion rise after increasing by $14.6 billion in December. Gold for April delivery rose 20 cents to settle at $1,575.10 an ounce at the Comex division of the New York Mercantile Exchange, while April crude oil futures rose $1.13 to close at $91.56 a barrel. The benchmark 10-year Treasury was falling by 16/32, raising the yield to 1.997%. The dollar was dropping 0.55%, according to the
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