Markets brush off Cyprus worries

FILE - In this March 20, 2013 file photo, Cyprus' Finance Minister Michalis Sarris, center, leaves after his meeting with Russian Finance Minister Anton Siluanov at the building of Russian Finance Ministry in Moscow, Russia. Sarris resigned Tuesday, April 2, 2013 after an investigation was ordered into how the country's economy nearly collapsed last month. (AP Photo/Misha Japaridze, File)
FILE - In this March 20, 2013 file photo, Cyprus' Finance Minister Michalis Sarris, center, leaves after his meeting with Russian Finance Minister Anton Siluanov at the building of Russian Finance Ministry in Moscow, Russia. Sarris resigned Tuesday, April 2, 2013 after an investigation was ordered into how the country's economy nearly collapsed last month. (AP Photo/Misha Japaridze, File)
Posted: April 04, 2013

The Dow Jones industrial average closed at a record high Tuesday after reports on auto sales and factory orders provided the latest evidence that the U.S. economy was strengthening.

Traders plowed money back into European stocks as the financial situation in Cyprus appeared to stabilize.

Health insurers powered the gains a day after the government released revised reimbursement rates for Medicare Advantage plans. The new numbers suggest that funding cuts will be less severe than analysts and companies had feared.

The Dow finished up 89.16 points, or 0.61 percent, to close at 14,662.01. It had risen as high as 14,684 in the late morning.

The Standard & Poor's 500 index rose 8.08 points, or 0.52 percent, closing at 1,570.25. It rose to within two points of the trading high of 1,576 it reached Oct. 11, 2007.

The Nasdaq composite rose 15.69, or 0.48 percent, to 3,254.86.

European markets closed sharply higher on the first trading day after a tense four-day holiday weekend. Paris' CAC-40 rose 2 percent, London's FTSE 100 1.2 percent, and Frankfurt's DAX 1.9 percent. The gains boosted confidence among U.S. investors.

While European markets were closed for the Easter holiday, many traders feared that Cyprus' precarious financial situation would worsen. That concern also weighed on U.S. markets Monday, said Peter Tchir, who runs the hedge fund TF Market Advisors.

But no bad news materialized. Instead, Cyprus' international lenders agreed to extend until 2018 its deadline for meeting key budget targets.

"Everyone was waiting to see if Europe had problems from Cyprus," Tchir said. "Instead, we got the all-clear signal."

Wall Street's trading day began with solid March sales reports from U.S. automakers. And orders to U.S. factories rose 3 percent in February, the best gain in five months, the government said - an increase driven by a surge in demand for commercial aircraft, an especially volatile category.

Health-care stocks rose the most of the 10 sectors in the S&P 500, adding 1.4 percent after Monday's news about Medicare Advantage rates.

UnitedHealth rose $2.77, or 4.7 percent, to $61.74, the biggest gainer in the Dow. DaVita HealthCare Partners Inc. rose $7.29, or 6.1 percent, to $127.20, to lead the S&P 500.

Airline stocks fell sharply after Delta Air Lines Inc. said a key measure of revenue was hurt last month by government spending cuts, a technical glitch, and attempts to get passengers to pay more.

Delta fell $1.31, or 8.1 percent, to $14.94.

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