The S&P 500 index stalled just points from its record close, once again Wednesday. On Tuesday the index finished less than 2 points from its all-time close, and came even closer on Wednesday before settling three points away from the record set in October 2007.
Some experts have said that they will continue to have doubts that the market's rally can persevere without a record from the S&P to match the Dow's, as the former index represents a far wider swath of American companies.
The stock index of 500 of the markets biggest companies hit its all-time high of 1,565 on Oct. 9, 2007, before the Great Recession and a financial crisis roiled financial markets.
"In terms of measuring the domestic stock market the S&P does a better job of taking a look at the larger companies in the market, certainly better than the Dow Industrials," says Tony Ogorek, a financial planner at Ogorek Wealth Management in Williamsville.
According to Bloomberg News, the index has moved higher than 1,560 in seven sessions just since March 14, but has still not crested its record.
A record for the S&P would be another boost for investors, coming just over three weeks after the Dow Jones industrial average, which tracks 30 big-name American companies, established a new record high,
“It would be nice to break it, and we will break it, but it doesn’t mean anything, really,” other than representing a resistance level, Robert Pavlik, chief market strategist at Banyan Partners said of the S&P 500’s record level.
The Dow record can also be seen as less significant becaus it watches a smaller slice of the market, by concentrating on fewer - and certainly smaller - companies.
Big company stocks and small-company stocks often part ways, said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. Big corporations generally have stronger ties to Europe, and their stocks wavered over the past week as traders kept an eye on negotiations to rescue Cyprus.
By contrast, smaller companies are less exposed to the rest of the world. "That's part of the reason small-caps have outpaced the market this year," Ablin said.Ogorek says when you factor in earnings and inflation, it appears as if the S&P "has a lot further to go," and he predicts the record will be shattered. Most analysts suggest it may not happen until April, but is poised to shatter the 2007 record.
"Unless something major comes along to derail this rally, it just seems like the market is going to keep climbing higher," said Marty LeClerc, the managing partner of Barrack Yard Advisors, an investment firm in Bryn Mawr, Pa.