S&P 500 Hits Record

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Although the Dow has set many records this year, the Standard & Poor's 500, considered a better measure of market health, finished at a record high Wednesday for the first time in seven years. Stock prices increased after a Federal Reserve report that was upbeat on the economy.

RENEE MONTAGNE, host:

The most widely followed benchmark of American stocks finished at a seven-year high yesterday. That's the Standard and Poor's 500 index, and it started climbing after the Federal Reserve released some upbeat words about the economy.

NPR's Jim Zarroli reports.

JIM ZARROLI: The Dow Jones industrial average also finished at a record yesterday, but it's done that a lot this year. The S&P 500 by contrast hasn't set a record for more than seven years, and the S&P is considered a broader measure of stock market health.

The market wasn't supposed to fare so well yesterday. A big plunge in the Shanghai stock market was supposed to send prices lower. But in the afternoon the Federal Reserve released the minutes of its last meeting and they were largely positive about growth prospects.

Mr. STUART HOFFMAN (Chief Economist, PNC Financial Services): And if they're right, that has positive implications for the economy and corporate profits.

ZARROLI: Stuart Hoffman is chief economist at P&C Financial Services.

Mr. HOFFMAN: At the same time, they reaffirmed their view that inflation, particularly core inflation, and despite the big run-up in gasoline prices, that inflation would remain well-behaved for the rest of this year. And that's always good news for both stocks and bond markets.

ZARROLI: The Dow and the S&P have now set records, but the other major index, the Nasdaq composite index, still isn't anywhere near the record it set in 2000, before corporate scandals and terrorist attacks set the market back.

Jim Zarrolli, NPR News, New York.

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