Stocks gained for the seventh day in a row, and the S&P 500 closed 10 points shy of its all-time high just a week after the Dow Jones Industrial Average (DJINDICES:^DJI) set a record of its own. The Dow gained another 50 points, or 0.35%, to finish at 14,447.
Despite some bearish news out of Europe and China, the momentum from last week's jobs report and record-setting optimism seemed to carry over. First, in China, inflation grew much faster than expected in February as the Consumer Price Index jumped 3.2% from a year ago, and industrial production and retail sales fell sharply. The jump in inflation was driven by a 6% increase in the food prices, which now rival prices Americans pay in the supermarket. Food inflation has surged because of the country's urbanization, leaving farmland and labor in shorter supply, and a ban on beef imports from all but three countries, because of mad-cow disease, has only exacerbated the problem.
Meanwhile, in Italy, which roiled markets just two weeks after its elections pointed to what will probably be a weak coalition government, investors were confronted with more bad news. On Friday, Fitch downgraded Italy's credit rating to BBB+ with a negative outlook, and today, the country reported that its GDP shrank by 2.8% in the fourth quarter over a year ago. Based on yields, Italian bonds are now as risky as Spanish treasuries.
On the Dow today, Boeing (NYSE:BA) led all components with a 2.1% gain as investors reacted to statements from one executive who said the company's solution to the Dreamliner battery fires will be a "permanent fix." The airplane maker also said it will increase its production rates of commercial planes to keep up with rising demand. Production of its 737 jets, for instance, will go from 38 a month this year to 42 a month in 2014.
General Electric (NYSE:GE) was the index's biggest laggard today, falling 0.6%, as CEO Jeffrey Immelt cited political uncertainty and regulatory constraint as reasons that may limit corporate spending this year. The company plans to continue focusing on dividend increases and share buybacks and nominated former SEC Chairman Mary Schapiro to the board. GE also said it will explore the possibility of expanding its cleanup of an area of the Upper Hudson River, which was designated as a Superfund site.
Late in the session, a judge in New York overruled Mayor Bloomberg's soda ban, which had been set to go into effect tomorrow. The ban would have fined any vendors selling cups of soda larger than 16 ounces. Today's suit was brought in part by the American Beverage Association and is a win for beverage companies, symbolically and financially. Stocks of companies that stand to benefit, however, such as Coca-Cola, Pepsi, and McDonald's, were mostly unaffected.