Stocks close at all-time highs

Stocks closed at their latest all-time highs today following news that business hiring surged in June, adding to evidence that the US economy is picking up momentum.

A board at the New York Stock Exchange shows the closing number for the Dow Jones industrial average today
A board at the New York Stock Exchange shows the closing number for the Dow Jones industrial average today

ADP, a payroll processor, said businesses added 281,000 jobs last month, up from 179,000 in the previous month. The figure suggests the government's monthly jobs report, due out tomorrow, could also show a significant gain from May.

The stock market climbed back to record levels a day earlier after separate reports showed that manufacturing expanded in China and the US, the world's two largest economies.

"We're in the middle of what's been an extended recovery, but there's still a lot of room to go," said Ed Hyland, a global investment specialist at a JPMorgan Private Bank. "We believe that for the stock market as well."

The Standard & Poor's 500 index rose 1.30 points, or 0.1%, to 1,974.62. The Dow Jones industrial average gained 20.17 points, or 0.1%, to 16,976.24. Both the S&P 500 and the Dow are at all-time highs. The Nasdaq composite fell one point, less than 0.1%, to 4,457.73.

Constellation Brands, which makes Corona and Negra Modelo beer, was one of the day's biggest gainers. The stock jumped 2.07 dollars, or 2.3%, to 90.45 dollars after the company said its fiscal first-quarter net income soared. .

Delta Air Lines was the day's biggest decliner. The stock dropped 2.07 dollars, or 5.1%, to 38.24 dollars after the company said that growth in a key revenue figure slowed in June. Delta said revenue per passenger fell on international routes because of a dip in business travel to Latin America during the World Cup soccer tournament and more passenger-carrying capacity among all airlines. Delta's stock is still up 38% this year.

Government bond prices fell. The yield on the 10-year Treasury note rose to 2.62% from 2.57% on Tuesday. The yield on the note, which rises as prices fall, has climbed from 2.45% at the end of May as signs have emerged that the economy is strengthening.

The impact of rising bond yields was also felt in the stock market.

Utilities fell the most of the 10 sectors that make up the S&P 500, declining almost 2%. Investors had bought utility stocks at the start of the year as bond yields dropped because they pay rich dividends.

Should the economy continue to improve and bond yields rise, investors will likely start to take money from the bond market and instead invest in stocks, said Jeff Knight, head of global asset allocation at Columbia Management, an asset manager. Stocks that should benefit most from an improving economy, such as industrials, should do well.

"Those sectors that tend to be thought of in yield and income terms, like utilities or telecoms, would be laggards," said Knight.