The Standard & Poor's 500's milestone came a day after a market rally in which the Dow industrials racked up their biggest one-day point-gain in more than four years. The S&P 500 also capped its best two weeks in 11 months.
The Dow crossed 13,900 for the first time and hit a lifetime high for a second straight day as GE roughly doubled its 2007 share buyback to $14 billion, in a week that saw several major companies announcing multibillion-dollar share repurchase plans.
Optimism about economic growth, corporate takeovers and profits have helped the indexes hit record levels, analysts said.
It's been a long time coming since we had the great bull market at the beginning of this decade, said Craig Hester, CEO of Hester Capital Management in Austin, Texas. An S&P 500 level of 1,600 is now not out of possibility this year.
What's powering this move is confidence in the earnings reports and massive amount of global liquidity from private equity and share buybacks, he said.
The Dow Jones industrial average rose 45.52 points, or 0.33 percent, to end at a record 13,907.25. The Standard & Poor's 500 Index gained 4.80 points, or 0.31 percent, t finish at 1,552.50, also a record close. The Nasdaq Composite Index advanced 5.27 points, or 0.20 percent, to close at 2,707.00.
The S&P 500 rose as high as 1,555.10. Its previous record of 1,553.11 was set on March 24, 2000, in the waning days of the Internet bubble.
The Dow hit an intraday record at 13,932.29. And the Nasdaq climbed as high as 2,707.64, its highest level in more than 6-1/2 years.
For the week, the Dow ended up 2.2 percent, the S&P 500 rose 1.4 percent and the Nasdaq gained 1.5 percent.
Early in the session, the Reuters/University of Michigan Surveys of Consumers said consumer sentiment rose in early July to its highest in six months, beating economists' forecasts. The news offset investors' worries about the economy.
GE, which topped advancers in the S&P 500 index, also maintained its outlook for the third quarter. Shares of GE, the world's second-largest company by market capitalization, rose 1.3 percent to $39.50 on the New York Stock Exchange.
Shares of Amgen Inc. gained 1.8 percent to $56.93 after the biotechnology company announced its board had authorized the additional repurchase of $5 billion of its common stock.
Energy companies' shares also advanced as crude oil prices jumped more than 1 percent, or $1.43, to settle at $73.93 a barrel. Exxon Mobil Corp. was up 0.8 percent at
Almost a year ago, on July 14, 2006, U.S. crude reached a NYMEX record of $78.40 a barrel.
Home builders' stocks rose on talk investor Warren Buffett was buying a stake in Hovnanian Enterprises. The Dow Jones home construction index was up 4 percent.
Shares of Hovnanian surged 12 percent to $18.53 and ranked among the NYSE's biggest percentage gainers, while shares of Toll Brothers, a luxury home builder, shot up 3.8 percent to $26.44.
Trading was moderate on the NYSE, with about 1.35 billion shares changing hands, below last year's estimated daily average of 1.84 billion. On the Nasdaq, about 1.77 billion shares traded, below last year's daily average of 2.02 billion.
Advancing stocks outnumbered declining ones by a ratio of about 17 to 15 on the NYSE.
In contrast, on the Nasdaq, the reverse was true, with about 16 stocks falling for every 13 that rose.
(Additional reporting by Kristina Cooke)