The S&P 500 index, a broad barometer of large US stocks, broke above its 2000 record closing high yesterday, nearly five years after the stock market bottomed in the wake of an economic recession and corporate scandals.

The S&P rose above its peak close of 1,527.46 to trade at 1,529.22 just after midday. But it remained shy of the all-time intraday high of 1,552.87, set during trading on the day of the previous closing high on March 24th, 2000.

The new level represents a rebound from a low of 776.76 reached in October 2002 after the economy was exiting a recession and various corporate accounting scandals had sparked a series of high-profile bankruptcies.

The recovery in the S&P has been primarily led by energy and materials stocks, while the technology sector, which powered the late 1990s stock rally, remains well below its record highs.

The S&P is now 7.8 per cent higher so far this year.

While it is now in record territory, the technology-laden Nasdaq Composite is currently at 2,587.77, still only just above half its record peak of 5,048.62 set on March 10th, 2000. Factors behind the recent rally in stocks include a record level of merger and acquisition activity led by private equity firms, a surge in corporations buying back their stock and better-than-expected first quarter earnings.

The S&P later slipped back to close just on 1,525.10, just behind the previous record. - (Financial Times service)