Stocks and bond yields punched higher Wednesday, and US indexes set records again, following more encouraging news on the economy.
The Standard & Poor’s 500 index rose 0.5 percent to 2,349.25 — its seventh straight gain and longest winning streak in 3½ years. The Dow Jones industrial average rose 0.5 percent to 20,611.86. The Nasdaq composite rose 0.6 percent to 5,819.44.
It’s a striking reversal from a year ago, when stocks around the world were tumbling on worries another recession was on the way. Since then, the economy and job market have continued to improve, along with corporate profits. And the market got a jolt of adrenaline in November, when Donald Trump’s surprise White House victory raised hopes for tax cuts and other business-friendly policies.
The S&P 500 is up nearly 26 percent over the last 12 months, with more than half of the gain coming since Election Day.
On Wednesday, reports showed that retailers had stronger sales in January than economists expected, and inflation at the consumer level was the highest in years. Consumer prices rose 2.5 percent in January from a year earlier, the highest rate since March 2012. The data give the Federal Reserve more encouragement to raise interest rates, and economists said the possibility is increasing that it may happen in March.
Treasury yields jumped Wednesday as investors sold off bonds. The 10-year Treasury yield rose to 2.50 percent from 2.47 percent late Tuesday. The 30-year yield rose to 3.08 percent from 3.06 percent.
When bonds pay more in interest, it can mean less demand from income investors for stocks that pay big dividends. Utility stocks in the S&P 500, which are some of the biggest dividend payers, fell 0.4 percent.
Airline stocks cruised higher after Warren Buffett’s Berkshire Hathaway disclosed that it added to its investments in several of them.
Southwest Airlines rose 3.6 percent, United Continental rose 2.7 percent, Delta Air Lines was up 2.6 percent, and American Airlines gained 2.1 percent.
Procter & Gamble, owner of Gillette, rose 3.7 percent after activist investor Nelson Peltz’s Trian Fund Management disclosed it owns a stake in the company.
American International Group had the biggest loss in the S&P 500 after reporting a larger operating loss than expected. It fell 9 percent.