The S&P 500 (SNPINDEX:^GSPC) fell back from its record levels last week, losing 18 points or just less than 1%. Fears about potential trouble in Europe outweighed gains related to the Federal Reserve's decision to end its quantitative easing program later this year, but with stocks still so close to record levels, dozens of stocks still hit new yearly highs. Let's take a look at why Altria Group (NYSE:MO), Alcoa (NYSE:AA), and Lorillard (NYSE:LO.DL) were among them.

Source: Lorillard.

Lorillard hit an all-time high, gaining 2.5% on the week after the tobacco giant confirmed that it and fellow cigarette-maker Reynolds American are in talks to merge. The combination of Lorillard and Reynolds would change the tobacco industry dramatically, with benefits for both companies. Currently, Lorillard has a much heavier exposure to menthol cigarettes than its two main rivals in the industry, and that leaves it potentially vulnerable to adverse rulings about menthol products specifically. On the other hand, Lorillard has been a first-mover in the electronic-cigarette industry, and if that trend continues to pick up steam, then a combined Lorillard and Reynolds could eventually gain a big lead in the U.S. e-cigarette market. Antitrust considerations would make a merger tricky, but if it can go through, it could be quite positive for both companies.

In that light, you'd think that Lorillard's news would be bad for Altria. Yet the tobacco giant rose 2.5% to hit its best level since splitting off its international business. Part of Altria's appeal comes from the fact that the company has been good about returning capital to shareholders through dividends and is reportedly considering a much larger share-buyback program as well. In addition, Altria has a substantial interest in beer-maker SABMiller, and that gives the company diversification that most of its peers lack. In the end, consolidation in the cigarette industry could help Altria, removing a potential source of pricing pressure and making the industry much closer to an oligopoly.

Source: Alcoa.

Alcoa soared almost 7%, marking a new three-year high as the aluminum company reported strong earnings for the second quarter. Alcoa's strategy toward emphasizing its higher-margin value-added products has been extremely successful, with recent acquisitions geared toward accelerating that process and making the company even more profitable. Yet Alcoa has also seen some success even in its lower-margin primary metals business, as pullbacks in production volumes are finally starting to have the desired impact of putting a floor under prices in the metals markets. Alcoa still has a way to go, but in time, the company could restore investor confidence in the aluminum business once and for all.

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