US stock market index hits post-financial crisis high

Markets in the US hit a post-financial crisis high on hopes central banks will stimulate their economies and the eurozone debt crisis is easing.
The S&P 500 index reached 1425, up 10 points, at highs not seen since May 2008 before the Lehman Brothers collapse. The index has been making continuous gains for the past six weeks, climbing 12% since June.
The number of shares being bought and sold has been at record lows, partly due to the summer period but also because investors are waiting on the policymaker meetings due to take place next month across Europe.
Markets have risen steadily as investors have pinned some hope on reports the European Central Bank could target specific borrowing costs for troubled eurozone countries as a trigger for intervention.
The Dow Jones and Nasdaq indexes also opened higher, while the euro hit a seven-week high against the dollar, up 1% at $1.2466. The pound was at a three-month high at $1.5784.
Spanish treasury bonds worth €4.5bn were sold with yields on 12-month bills down to 3.07% from 3.9% and 18-month bills down to 3.335% compared with 4.242% previously.
Guy Foster, head of portfolio strategy at Brewin Dolphin said: “Since Mario Draghi’s famous announcement that the ECB will do whatever it takes to ensure the survival of the euro, events have been moving apace.
“Even long-time eurozone sceptics must accept that a huge policy shift is underway and that Europe is making an uncharacteristic rendezvous with economic pragmatism.”
The perception of declining risks from the euro crisis has been a major factor behind equity gains, however, any ECB rescue is still reliant on German political leaders’ attitudes at key meetings.
Nick Spiro of Spiro Sovereign Strategies warned: “Market expectations of aggressive bond-buying of Spanish and Italian debt on the part of the ECB are overdone.
“The watchword is conditionality. When the German government itself comes out in favour of ECB bond-buying, it should be crystal clear to investors that whatever ECB-backed bond-buying programme emerges is going to be a heavily conditional one and not the unlimited intervention that Madrid and Rome have been clamouring for.”
The FTSE 100 leading index has also been trading well, at a four-and-a-half month high. It closed up 33 points on Tuesday at 5858. It would need to hit 6300 to be at its own four year high.