S&P 500 index closes over 2,000 for first time ever

It was a big round-number day for the stock market.

The Standard & Poor's 500 index closed a hair above 2,000 points Tuesday, 16 years after it closed above 1,000 points for the first time.

The milestone added to the market's gains from the day before and extended the stock index's record-shattering run this year.

The S&P 500 index, a widely followed barometer of the stock market, has closed at a new high 30 times this year. By this time last year, it had done so 25 times.

The index briefly rose past 2,000 on Monday, but closed just below that level. It still set a record-high close in the process.

"There's perhaps a small psychological boost when you get over such a significant price level," said Cameron Hinds, regional chief investment officer at Wells Fargo Private Bank.

US stocks, in the midst of a five-year rally, have surged in the final weeks of the summer after dipping earlier this month on concerns about geopolitical tensions in Russia and the Middle East.

The latest string of shattered market benchmarks comes as investors cheered new indications that the economy is strengthening, setting the stage for stronger company earnings.

Major US indexes began in positive territory in premarket trading Tuesday. That trend held as investors began to digest the latest economic reports.

The Conference Board said Tuesday that its consumer confidence index rose this month to the highest point in nearly seven years. A separate report showed that orders of durable manufactured goods surged by a record 22.6 percent in July, thanks to a jump in aircraft sales. A third report showed U.S. home prices rose in June, although at a slower pace.

Stocks opened slightly higher and remained in the green the rest of the day. The S&P crossed above 2,000 points early on, and hovered at or above the mark as it approached the close of regular trading.

Moments before the close it dipped below 2,000, then inched up just above.

The S&P 500 rose 2.10 points, or 0.1 percent, to end at 2,000.02. Seven of the 10 sectors in the S&P 500 index gained, led by energy stocks. Utilities declined the most.

The Dow Jones industrial average rose 29.83 points, or 0.2 percent, to 17,106.70. The Nasdaq composite gained 13.29 points, or 0.3 percent, to 4,570.64.

The major US indexes are riding a three-week streak of weekly gains and are up for the year.

The string of record highs this year isn't unusual when a market is recovering from a downturn, said Kate Warne, an investment strategist at Edward Jones.

In the past, once stocks have hit a new high after a downturn, they have continued higher for about two years, on average, she said. The first time the S&P 500 hit a new high after the financial crisis was March 2013. So this year's record run is still within the average range.

"Markets don't climb sharply. They tend to climb slowly, and that's probably good news for a continued climb in the future," Warne said.

The Dow also has put up some big numbers this year, notching 15 new closing highs. That trails the 30 it racked up by this time a year ago.

While the market is setting records, many stock watchers believe equities remain fairly valued, though not cheap.

The S&P 500 is trading around 16 times its forward-operating earnings, or over the next 12 months. The historical average on that measure is about 15 times.

"That says stocks are no longer cheap, but we also don't think they're expensive," Warne said. "Historically, when the price-earnings ratio has been in that range, returns over the next year have been around 7 percent. That's not bad."

Bond prices fell. The yield on the 10-year Treasury note rose to 2.39 percent. U.S. crude for October delivery rose 51 cents to $93.86 a barrel. In metals trading, gold rose $6.30 to $1,285.20 an ounce, silver rose three cents to $19.39 an ounce and copper fell three cents to $3.19 a pound.

Among the stocks making big moves Tuesday:

— Amazon rose 2.3 percent after saying that it would buy video streaming company Twitch for $970 million. The stock climbed $7.81 to $341.83.

— Best Buy fell $2.19, or 6.8 percent, to $29.80 after the electronics retailer reported that its fiscal second-quarter net income plunged 45 percent as sales weakened.

— Orbitz fell 4.6 percent after American Airlines and US Airways disclosed they are pulling flight listings from the site because they have not been able to reach agreement on a long-term contract with the travel booking website operator. Orbitz shed 39 cents to $8.04.

The Standard & Poor's 500 index, which was launched in 1957, has risen 8.2 percent this year and has gone without a correction, which is defined on Wall Street as a drop of 10 percent or more, for close to three years. These are some of the recent milestones for the S&P 500.

— Feb. 2, 1998 - The index closes above 1,000 for the first time, driven by optimism that financial markets are stabilizing as a financial crisis in Asia passes.

— Oct. 9, 2007 - The S&P 500 closes at an all-time high of 1,565.15. Traders and investors speculate that the Federal Reserve will cut interest rates to help a U.S. economy threatened by signs of an emerging credit crisis. The October record stands for five and a half years as the stock market loses more than half of its value in the financial crisis and Great Recession that follow. The index bottoms out at 676.53 in March 2009.

— March 28, 2013 - The index closes at 1,569.19, eclipsing its record close from 2007. Investors are encouraged by rising company earnings and feel more confident that the U.S. economic recovery can endure, despite a series of crises in the U.S. and overseas.