Despite Washington, S&P Hits Another Record Closing High

NEW YORK ( TheStreet) -- The S&P 500 Index set another record close amid speculation the  Federal Reserve will stick with its equity-bolstering stimulus program in lieu of tepid economic data releases. Solid growth from China and strong domestic corporate earnings added to the view that stocks can extend the year's record gains.

The S&P 500 rose 0.7% to 1744.48, pushing the 2013 advance to 22%, its best performance to start a year since 1997. The Dow Jones Industrial Average gained a modest 0.18% to 15,399.26 while the Nasdaq surged 1.3% to 3914.28 as Google (GOOG) reported earnings that beat estimates catapulting the stock to more than $1,000 per share, the first technology stock to rise to a four-figure price.

For the 5-day trading week, the S&P rose 2.4%, its best week since the 5-day period ending July 12. The Dow added 1.1% and the Nasdaq increased 3.2% this week.

"Today and yesterday it's as if the budget [debt ceiling] was just a bad dream," John Manley, chief equity strategist at Wells Fargo who helps manage $222.1 billion in total assets, said in a phone interview. "The Fed's not going to taper right away, the market valuation at around 14.5 times is not overvalued and earnings are better than expected, even if not great." 

China's third-quarter gross domestic product rose to 7.8% in line with expectations, showing acceleration for the first time in three quarters, and helping to fuel gains in Asian equity markets.

While the U.S. debt ceiling has only been delayed until January, investors voiced confidence that ongoing monetary stimulus rather than politics would drive market sentiment. Chicago Fed President Charles Evans said Thursday that the central bank shouldn't start reducing the pace of bond buying due to disruption to economic data during the government shutdown. Dallas Fed President Richard Fisher added that political dysfunction in Washington supports the case for not tapering in the near term.

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