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S&P 500 Hits Record High as Investors Bet on Improving Economy

 / Updated  / Source: CNBC.com
Traders work on the floor of the New York Stock Exchange on Thursday. Stocks closed higher, pushing the S&P 500 to an all-time high, as Wall Street bet the U.S. economy would rebound from its first contraction in three years.JUSTIN LANE / EPA

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Stocks closed higher on Thursday, pushing the S&P 500 to an all-time high, as Wall Street tracked falling Treasury yields while betting the U.S. economy would rebound from its first contraction in three years.

The Dow Jones Industrial Average closed unofficially 65 points higher and the Nasdaq added 22 points. The S&P 500 hit an intraday record for a third straight session, and closed at an all-time high, rising 10.25 points, or 0.5 percent, to 1,920.03, with materials and consumer staples faring best and telecommunications the laggard among its 10 major industry groups

The Commerce Department reported gross domestic product declined at a 1 percent annualized rate in the first quarter. Analysts had estimated a 0.4 percent contraction.

Separately, the Labor Department reported initial jobless claims falling by 27,000 to 300,000 last week, compared to estimates of 326,000. The latest number is "a positive," and brings the four-week average to 311,500, the lowest since August 2007, offered Peter Boockvar, chief market analyst at the Lindsey Group.

Separate data had pending home sales up 0.4 percent in April, below expectations.

On Thursday, benchmark yields turned higher, with the 10-year Treasury note up 2 basis points at 2.461 percent, after falling as low as 2.3971, its lowest since June.

"The key thing for investors now is don't get fooled by the bond market, as it is distorted by central banks. If you torture something long enough it will lie to you, and that's what central banks have been doing to the bond market," said David Kelly, chief market strategist at J.P. Morgan Funds.

"We knew that weather dramatically impacted growth in the first quarter and we fully expect a bounce back in the second quarter," noted Dan Greenhaus, chief strategist at BTIG,

Hillshire Brands stock rose 17 percent after Tyson Foods offered to acquire the meat producer for $50 a share. Shares of Costco Wholesale edged lower after the warehouse club operator reported third-quarter results beneath estimates

The dollar retreated against the currencies of major U.S. trading partners, while greenback-denominated commodities were mixed. Gold futures fell, and the price of oil increased.

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