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Stocks hit a new four-year high

Updated at 10:25 p.m. ET: Stocks hit a new four-year high Tuesday as equity markets continued to grind steadily higher on hopes that central banks will act in the near future to stimulate their economies.

In early trading the S&P 500 passed this year's high of 1,422.38 set in April, making a four-year intraday high.

The S&P 500 has risen nearly 3 percent so far in August. Much of those gains have come on a few outsized days while other days have seen small incremental gains. Volumes have been light as investors wait for central banks' meetings next month where policymakers are expected to take action to ease Europe's debt crisis and boost the economy.

"I am looking for new highs in the major indexes," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "Overall there is no one major negative that's out there right now that people are scared of."

The perception of declining risks from the euro crisis has been a major factor behind equity gains. Yields at a Spanish short-term debt auction dived on Tuesday, while Europe's volatility index hit a one-month low, signaling a steady rise in investors' appetite for risk.

"With no negative headlines dampening enthusiasm the market looks ahead to another milestone," said Andre Bakhos, director of market analytics at Lek Securities in New York. "That could easily be accomplished today."

Best Buy Co shares slumped. The company cut its fiscal-year profit outlook on Tuesday, citing lower expectations for industry wide sales and uncertainty about key product introductions, and the consumer electronics retailer suspended its share buybacks for the year.

Signs that the U.S. labor market is performing better than previously thought have also helped stocks.

European stocks rose, keeping a four-week rally alive, as investors bet the European Central Bank will soon start buying Spanish and Italian bonds to help lower their borrowing costs.

Facebook Inc director Peter Thiel sold roughly $400 million worth of shares in the Internet social networking company last week, cashing out most of his stake. The sale comes as Facebook shares lost 50 percent of their value since its IPO earlier this year.

The chief executives of Apple Inc and Samsung Electronics Co Ltd have talked but did not settle the high-stakes patent dispute between the two electronics companies, a Samsung attorney said in court on Monday.

Citigroup Chief Executive Vikram Pandit has rejected the idea of big banks being split up, the Financial Times reported on Tuesday.

Pandit said Citi, formed through mergers such as the acquisition of Travelers in 1998, had already gone back to the basics of banking, and had sold most of the units from that deal.

Global buyout fund KKR & Co L.P. has placed a bet on China's $38 billion youth apparel retail market, saying that it will acquire a stake in privately held retailer Novo Holdco Ltd for $30 million.

U.S. stocks closed flat on Monday after a six-week run of gains as the European Central Bank quashed a report on what strategy it may use in any market intervention to stem the region's debt crisis.

Reuters contributed to this report.